Author Archive
07.09.10 HMRC Guidance – Pakistan floods disaster – guidance on transmitting money
Posted by: BTC in General News & Cases, HMRC News and Guidance on September 7th, 2010
The Government recognises the crucial importance of individual giving and charitable donations at times of humanitarian crisis such as the Pakistan floods and therefore understands and values people’s desire to give money. This underlines the importance of knowing that money sent with best intentions is not inadvertently finding its way into the wrong hands.
The normal risk based approach and customer due diligence measures must be applied by money transmitters when an individual is sending their own money to either family members or to a relief organisation in Pakistan.
If money collected by a charity or religious organisation is being sent we recommend that you do the following.
- Check the identity of the person arranging to send the money.
- Obtain the name and address of the charity or religious body.
- Check on the Charity Commission website (Opens new window) to confirm the organisation is a registered charity and obtain confirmation that the person is a genuine representative of the charity or religious organisation. Many of the charitable and religious organisations with links to Pakistan are registered with the Charity Commission.
If the organisation is not on the register you may still undertake the transaction but you should make further enquiries to satisfy yourself that the money being transmitted is not terrorist financing or the proceeds of crime.
The further enquiries could include questions about how the money was collected and enquiring about who it is being sent to. If after making further enquiries you are not satisfied that this is genuine you should consider making a suspicious activity report to the Serious Organised Crime Agency.
07.09.10 Charity Commission publishes advice for donations for the floods in Pakistan
Posted by: BTC in General Information & FAQ's on September 7th, 2010
The Charity Commission, the independent charity regulator for England and Wales, has published advice for people who want to support those affected by the floods in Pakistan, whether by fundraising or by making a personal donation.
The public’s support is crucial to enable charities to deliver desperately needed aid to Pakistan but it is vital that donations go to a genuine charity so that they reach those in need. Sadly, there are criminals who try to take advantage of the public’s generosity in response such disasters, and the Commission has been made aware in previous emergency appeals, such as the Haiti appeal, of online scams designed to steal charitable donations. These can take the form of fictitious appeal websites, email appeals that falsely use the name of genuine charities, or appeals from fictitious charities.
The Commission is urging the public to continue giving but to be vigilant, and has the following advice for those who wish to make a donation:
- Be careful when responding to emails or clicking links within them to ensure that they are genuine. If you have any concerns about the legitimacy of a request for donations that appears to come from a charity, don’t hesitate to contact that charity directly.
- If you are in any doubt about a charity collector, ask for their identification and the charity’s name and registration number. If you are not happy about giving then and there, you can check to see if the charity is on the public register of charities on the Commission’s website – www.charitycommission.gov.uk.
- If you are concerned that you may have been targeted by a fundraising scam, you should report this to the police. You should also contact the Charity Commission on 0845 300 0218 or via the website – www.charitycommission.gov.uk.
- If you want to donate online to a particular charity, visit the charity’s website.
Think about how you are going to give. If you are a UK taxpayer and donate directly to a charity – whether online, over the phone, by post or by handing in a cheque at the charity’s office or shop – it can claim Gift Aid to maximise your donation.
An appeal for the Pakistan floods is being run by the Disasters Emergency Committee (DEC). The money raised will support the efforts of the DEC’s members, which are 13 of the major UK aid agencies and all UK registered charities. Information is on the DEC website – www.dec.org.uk. Numerous other registered charities are involved in the relief efforts and are currently fundraising.
There are laws around collecting money for charity in public which are there to protect donors and make sure that the money raised goes to a genuine charitable cause. If you want to fundraise for those who have been affected by the Pakistan floods, you should:
Have the necessary permission from your local authority or the Metropolitan Police if you live in a London borough.
Only collect using a sealed tin or container.
- Always make sure you state the name and registration number of the charity you are collecting for.
- Always make sure there is more than one person to count the collection proceeds and sign off the total amount
Bank any cash as soon as possible, preferably straight into the charity account. Get a receipt from the Bank/Building Society. - Report back to your community so they are reassured that the money has reached the good cause. You may wish to put notices in shops/post offices, or let your local paper know how much you raised and thank people for their support.
10.08.10 External consultants cannot act as a Nominated Officer under Money Laundering Regulations
Posted by: BTC in AML Legislation updates, HMRC News and Guidance, Professional Bodies on August 10th, 2010
As an external consultant I am usually in the situation where systems we devise for compliance starts with a simple policy statement, which firstly details who is and how to communicate with, the nominated officer, who will be a senior member of the firm, a director, partner or owner manager. We remind firms of their responsibilities under the Money Laundering Regulations, It is after all their business and they must accept reasonability for its successful running.
It does come as no surprise, therefore, that the Financial Services Authority (FSA) has recently censured and banned three directors from acting as senior managers for failing to meet their supervisory standards. The FSA investigation found that the directors had been relying too heavily on external consultants for advice on how to run their business.
It is equally unsurprising then that HM Revenue & Customs (HMRC) have also announced that they take the same view to the FSA in relation to businesses meeting their obligations under the Money Laundering Regulations.
HMRC also state that they have no objections to businesses getting advice from external consultants regarding their obligations under the Regulations, as long as the responsibility for complying with the Regulations remains on the business rather than any consultant.
What does come as a surprise is that some consultants, who should frankly understand the Regulations better, have recently offered their services to act as the Nominated Officer for a business. HMRC has no formally announced that it does not consider that a consultant outside the business can be appointed Nominated Officer for any of the businesses HMRC supervise under the Regulations.
20.07.10 HMRC issue new Anti money laundering guidance
Posted by: BTC in HMRC News and Guidance on July 21st, 2010
A new set of anti money laundering guides have been published on the HMRC internet site to replace Public Notice MLR8: Preventing money laundering and terrorist financing. The new guides are sector specific and provide detailed guidance in relation to the legislation, risks, record keeping and reporting requirements relevant to each business sector.
The new guides will be available on-line only. This follows on from HMRC’s announcement on 12 April 2010 that they would stop sending printed copies of Public Notice MLR8 to businesses we supervise and publish MLR8 on the internet only. All relevant businesses should now refer to the internet when they need to check anti money laundering guidance. Printed copies of the current Public Notice MLR8 Preventing money laundering and terrorist financing dated August 2008 have now been withdrawn.
The new anti money laundering guides are as follows:
- Anti money laundering guidance for Money Service Businesses
- Anti money laundering guidance for High Value Dealers
- Anti money laundering guidance for Trust or Company Service Providers
The guidance should make it easier for businesses to understand what is required of them under the Money Laundering Regulations and other legislation.
Money Service Businesses (MSBs) should note that the Counter-Terrorism Act guidance has been incorporated into the ‘Anti money laundering guidance for Money Service Businesses’ this is available at Appendix 7 of the guidance. This will assist them in complying with the terms of a direction which is a legal requirement.
MSBs should also be aware that guidance for E-money issuers will be incorporated and published in the new guidance shortly.
High Value Dealers should note that guidance on proliferation financing risks will be incorporated and published in the anti money laundering guidance for High Value Dealers shortly.
Accountancy Service Providers (ASPs) should continue to refer to the Consultative Committee of Accountancy Bodies (CCAB) guidance. HMRC are considering whether they can provide specific sectorial advice for Accountancy Service Providers on their Money Laundering Regulations website.
This would be a welcome move. Most professional bodies have already written simpler guidance than the CCAB, for the members they supervise and many will be aiming for HM Treasury approval for them. It would not seem wise to leave those in most need of simplified sector guidance with only the complex CCAB guidance to reply upon.
17.07.10 HMRC Publish Supervisory Visits Statistics
Posted by: BTC in HMRC News and Guidance on July 19th, 2010
In mid June HMRC a paper, which went to some length to describe the activity of the HMRC supervisory team and publish various statistics.
HMRC now state that between the four sectors they have responsibility for supervision they now have over 18,000 registered firms, of which just over 14,000 are accountancy service providers (ASP’s) or trust and company service providers (TCSP’s).
HMRC has not yet, in any force, started compliance visits to either TCSP’s or ASP’s, so therefore there compliance visits have been focused upon the remaining 6,000 money service businesses and high value dealers.
In just the eight month period between September 2009 and April 2010 HMRC compliance officers carried out 908 visits to businesses, this is a tremendous figure, with almost 15% of all firms having a visit in that period. This rate of supervision has to be commended; however, unless the rate must fall considering the sheer volume of ASP’s that must come under the supervision of HMRC.
The other interesting statistic to come from these visits was that 193 warning letters were issued, which is just over 21% of the firms visited. If you look at it from the opposite point of view, almost 80% of businesses visited had made good attempts at coping with aml compliance. That has to be good news.
16.07.10 HMRC Publish their paper ‘What are your fees used for?’
Posted by: BTC in HMRC News and Guidance, Professional Bodies on July 19th, 2010
In mid June HMRC published the above paper, which went to some length to describe the activity of the HMRC supervisory team and publish various statistics. This contains some very interesting statistics and some serious areas for concern, especially in the accountancy service providers sector.
HMRC now state that between the four sectors they have responsibility for supervision they now have over 18,000 registered firms, of which just over 12,000 are accountancy service providers (ASP’s).
HMRC in 2009, data mined tax return information and found that there are over 92,000 ASP’s, ranging from the small bookkeeper or payroll bureau to the major firm of Chartered Accountants.
When you actually work out who, from this total figure, is actually supervised by one of the other supervisory bodies, you find a massive short fall in registered firms. For example, the ICAEW has around 16,500 firms it supervises, this is the largest of the accountancy bodies; the AAT for example has 3,500 generally smaller firms under its wing. In total you find that between the professional body supervisors they account for less than 38,000 of the total in the sector.
When you add in the 12,000 HMRC firms you find you have a short fall over around 42,000 firms, for whom, after one and a half years of committing a criminal offence by operating unregistered for AML supervision still carry on regardless.
With HMRC setting the starting penalty for non-registration at £5,000, you would think it would act as a deterrent. HMRC have been working in conjunction with the other supervisor bodies to work out who of the 92,000 is not currently registered. With HMRC’s policy of ‘policing the perimeter’, I believe that a lot of penalty notices will be hitting many a firms door mat by the end of 2010.
02.07.10 Chartered accountant faces eight years behind bars
Posted by: BTC in General News & Cases on July 2nd, 2010
A London Chartered accountant faces eight years behind bars after being convicted of manipulating both his clients’ and his own tax returns, pocketing £11m in income tax and VAT payments.
Christos Charalambous (58) of Palmers Green, London, completed over 6,000 self assessment tax returns for clients which included fictitious expenses claims in order to increase the tax repayments due. He also understated the income he received from client fees on his personal returns and failed to register, declare and pay VAT due on his accountancy firm Charltons. Many of Charalambous’ clients were from other EU countries and had little understanding of the UK tax system.
The court heard how Charalambous would submit tax returns for his clients to the Inland Revenue (IR) (up to April 2005) and HMRC (from April 2005) without showing his clients what information he was including. He would then receive the repayments from IR/HMRC, deduct a minimum of 15% fee and repay the remainder to his clients, who would not question the amount refunded as they trusted him to complete the returns correctly. The total amount of repayment claimed by Charalambous on his clients’ behalf was £11,222,472.
Between 1997/98 and 2004/05, he understated client fee income on his own self assessment tax returns by £807,406. He also failed to declare and pay £180,082 VAT due to HMRC.
He was found guilty on six counts of cheating the public purse at Blackfriars Crown Court following a trial that lasted seven weeks.
On passing sentence, His Honour Judge Richardson said: “The offences are more serious as you were a chartered accountant. HMRC ought to be able to trust you as should your clients. You exposed them to the dishonesty that you practice. With tax enquiries, you responded with evasion and lies.”
“Charalambous is a thoroughly dishonest accountant who was motivated by greed. He betrayed the trust of innocent and vulnerable people to feed that greed. This deprived the nation’s public services of millions of pounds. Our aim is to pursue and prosecute those involved in this type of criminal activity and reclaim the proceeds of their crime,“ said Steve Armitt, assistant director of criminal investigation for HMRC.
A Confiscation Order is being pursued.
22 April 2010 SOCA announce one of six most wanted arrested in Amsterdam
Posted by: BTC in General News & Cases, SOCA - Latest News on April 22nd, 2010
One of six most wanted arrested in Amsterdam
The new Dutch Crimestoppers operation saw the arrest of its first target yesterday.
James Vincent Muldoon, 30, of Liverpool, absconded from his trial for armed robbery in 2007 and was sentenced in his absence to 13 years in prison.
He was believed to be on the run in the Netherlands and became one of six men on the ‘most wanted’ list when SOCA, Crimestoppers UK, BelM (Dutch Crimestoppers), Amsterdam Police and the Amsterdam office of the Public Prosecution Office launched Operation Return in March.
This joint initiative aims to prevent UK fugitives hiding from the law in Amsterdam. A similar Crimestoppers campaign in Spain – Operation Captura – has successfully led to the return of 31 of the 50 most wanted fugitives hiding out on the Spanish Costas. Some of the criminals wanted there are thought to have moved on to Amsterdam because the campaign in Spain made life too uncomfortable for them.
Muldoon was arrested on 21 April at a house in Amstelveen. He is now in custody and will appear before a Dutch court in the near future in relation to his extradition to the UK.
16.04.10 Decision on appeal against registration under the Money Laundering Regulations 2003
Posted by: BTC in AML Legislation updates, HMRC News and Guidance on April 16th, 2010
Decision on appeal against registration under the Money Laundering Regulations 2003
A First-tier Tribunal (Tax Chamber) decision regarding registration of businesses under the Money Laundering regulations 2003 has now been published.
The Appellant had claimed that it was not liable to register with HMRC under the Money Laundering Regulations 2003 because it was not carrying out any business as a money transmitter in the UK and any money transfer services in the UK were operated by its UK agents. The Tribunal, however, has dismissed this appeal and ruled that the appellant did carry on a money service business in the UK and carried that business on at each branch of its agents or sub-agents.
The appellant is therefore required to register with HMRC and pay a fee to HMRC for all premises where they had agents carrying on business on their behalf.
This confirms the present position concerning registration.
08.04.10 Crime proceeds spent on Wigan allotment project
Posted by: BTC in General News & Cases on April 8th, 2010
Thousands of pounds confiscated from criminals have been donated to an allotment project in Greater Manchester.
Norley Hall allotments in Wigan has been given £5,000, which was raised through the police’s payback scheme.
Under the scheme, money raised by criminals is given to the community.
The allotment was set up to encourage youngsters who had been involved in anti-social and criminal behaviour to give something back to their community.
The young people will use the area to grow flowers and plants which will be given to local victims of crime, police said.
Insp Phil James, of Greater Manchester Police, said the scheme, which is in its first year, had led to a reduction in anti-social behaviour and criminal damage in the area.
