Category: HMRC News and Guidance

Latest Guidance and news from HMRC

  • Money Laundering Regulations Breaches

    HMRC issue fines for Money Laundering Regulations breaches

    Obliged firms play a vital role in the financial systems of the UK’s economy. They facilitate transactions of significant importance daily. However, that also exposes them to being used for illegal purposes. Therefore, they must always act with integrity and abide by the rules. One of the regulations that they must pay special attention to is the Anti-Money Laundering Regulations.

    For professional firms that provide defined services, the regulations require their anti-money laundering systems and controls meet the UK’s anti-money laundering regime’s requirements. The regulations require these firms to ensure that relevant employees are kept aware of the firms’ policies, controls and procedures and are accountable for their actions. (more…)

  • HMRC to contact businesses registered under the Money Laundering Regulations

    HM Revenue & Customs (HMRC) Anti-Money Laundering Compliance Officers will shortly begin a programme of telephoning businesses registered with, and supervised by HMRC under the Money Laundering Regulations (MLR).

    These calls will be in addition to and will complement ongoing HMRC compliance activity. HMRC will be contacting businesses to make sure that up to date information is held about their activities. The calls will also further improve HMRC understanding of customers and to find out whether they need any additional help.

    HMRC can ask registered businesses for this information under Regulation 37 of the MLR 2007 and this has proved to be a very cost effective way for both customers and HMRC supervisors to conduct its compliance activity.

    During the calls the HMRC officers will confirm their identity and ask businesses for their security information. They will ask for details of business activities, customers and also answer any questions. This will help HMRC decide whether a visit is needed and give businesses the opportunity to clarify any issues they may have.

    The Revenue carrying out these checks by phone as they are quicker and less invasive than personal visits and if done correctly, HMRC should be able to distinguish based on the evidence gained form the phone call, between firms who understand their obligations under the Money Laundering Regulations and those who do not.

    A minority of supervised firms will be not be up to standard on their compliance to MLR obligations, whereby follow-up action by the way of a personal visit may be appropriate.

  • United Kingdom and Isle of Man to sign enhanced tax information exchange agreement

    United Kingdom and Isle of Man to sign enhanced tax information exchange agreement

    The Government is to sign a tax information sharing agreement with the Isle of Man which will provide HM Revenue & Customs (HMRC) with a range of additional information about potentially taxable income in Manx bank accounts. This is part of a package of measures being developed by the UK and the Isle of Man as part of a shared commitment to combat tax evasion.

    Under the enhanced information exchange agreement, the UK and Isle of Man will automatically exchange a wide range of information on tax residents, on a reciprocal basis. To minimise burdens on financial institutions the agreement will follow, as closely as practicable, the UK-US Agreement to Improve International Tax Compliance and to Implement FATCA. The agreement will be concluded to the same timetable as the agreement currently being negotiated between the Isle of Man and the United States.

    Exchequer Secretary to the Treasury, David Gauke said:

    “This agreement will significantly boost the UK’s ability to tackle cross-border tax evasion. Automatic information exchange is an important tool in boosting HMRC’s ability to clamp down on those who seek to hide their money overseas. Our ground breaking agreement with the US sets a new standard in international tax transparency and today’s agreement between the UK and Isle of Man to move to much greater levels of automatic exchange is the next step in this process.

    “For years people said this couldn’t be done, so I welcome the progress we have made so far with the Isle of Man. We are looking to reach similar agreements with other jurisdictions and are in discussions with Jersey and Guernsey about enhanced information exchange as part of our common commitment to combat tax evasion.”

    Details of the necessary operational and implementation requirements are still being discussed and will be announced in due course.

    When combined with HMRC’s new centre of excellence in offshore evasion and the development of a comprehensive strategy to tackle it, HMRC will be well placed to clamp down even harder on those who evade tax by hiding their money offshore.

     

  • Memorandum of Understanding between HMRC and the FSA for joint supervision

    A Memorandum of Understanding between HMRC and the FSA was published on the FSA website on 1 June 2012. It’s about sharing information and joint visits. This will be of particular relevance to many money services businesses whom are supervised not just under the Money Laundering Regulations by HMRC but are also the FSA by the Payment Services Regulations.

    Businesses that are supervised by HMRC and the FSA will find this information useful. The memorandum documents the co-operation between the two organisations for monitoring and the execution of supervisory visits and functions.

    In preparing their Memorandum of Understanding the FSA and HMRC have had regard to the Statutory Code of Practice for Regulators1 which came into force on 6 April 2008. The Code sets out general principles by which regulatory activity should be undertaken, and provides the following guidance on the arrangements for collaboration between different regulators in paragraph 6.5 as follows:

    “Where two or more inspectors, whether from the same or different regulators, undertake planned inspections of the same regulated entity, regulators should have arrangements for collaboration to minimise burdens on the regulated entity, for example, through joint or co-ordinated inspections and data sharing”.

    Relevant businesses will have no increase in their burden for supervision, but enjoy a far more joined up approach from the supervisory authorities helping to ease the process.

    The Memorandum details co-operation concerning;

    • The disclosure of confidential information
    • Single points of contact
    • Joint visits

    The full document can be found by clicking on the following link;

    Memorandum of Understanding between HMRC and the FSA (PDF 54K) (Opens new window)

  • Identifying counterfeit euros

    Identifying counterfeit euros – consultation decision

    HM Treasury (HMT) have published the results of their consultation on the UK’s implementation of European Union (EU) Regulations 44/2009 and 45/2009, requiring Currency Exchange Offices and Money Transmitters to have procedures in place selectively to check euro notes and coins using an approved method.

    Following the consultation, the Government has decided to create a new criminal offence for failure to comply with the checking requirements of the EU regulations in relation to counterfeit euros.

    You can read the full report by following the link below.

    UK enforcement measures for EU Regulations 44/2009 and 45/2009 on counterfeit euros on the HMT website (Opens new window)

  • Former ATT President Charged With Tax Fraud

    Former ATT President
    Former ATT President
    Andrew Meeson, the former President of the Association of Taxation Technicians and three of his business associates who administered a pension scheme, have been charged with stealing £5million through a tax fraud targeting the pension industry.The four – three men and a woman – were arrested last year in dawn raids carried out by HM Revenue & Customs (HMRC) investigating an alleged multi million pound fraud. The raids took place at residential and business premises in the West Midlands, Derby and Leicester.

    Simon De Kayne, Assistant Director of Criminal Investigation for HMRC, said: “Four people have been charged linked to what we believe is a fraud resulting in over £5 million being stolen from public funds. We are committed to bringing such cases to the courts and depriving those involved of the proceeds of their crime.”

    Meeson resigned from his role as president of the ATT last week in order to fight the charges.

    On April 8 2010, the Pensions Regulator took action to suspend Tudor Capital Mgt from acting as trustees from pension trust schemes at the same time HMRC obtained search warrants for the company.

  • 01.09.11 Money Laundering Regulations cease to apply to stocktakers from 1 October 2011

    As part of its review of the Money Laundering Regulations and in order to ensure its effective and proportionate implementation by businesses in the UK, the Treasury has reviewed the risk of money laundering and terrorist finance with HMRC and the Institute of Licensed Trade Stock Auditors.

    As a result the Treasury has announced that stocktakers who do not carry out bookkeeping or other accountancy services will be exempt from the Money Laundering Regulations (MLR) 2007 from Saturday 1 October 2011.

    This means that they will no longer need to register with HMRC.

    This decision also supports the Government’s policy of reducing regulatory burdens on businesses.

    HMRC continue to encourage stocktakers to be diligent and report suspicious activity to the Serious Organised Crime Agency (SOCA). More information can be found at www.soca.gov.uk.

    Stocktakers who offer bookkeeping or other accountancy services will stay on HMRC’s register.

    From Monday 3 October 2011 HMRC will be writing to the stocktaking businesses already registered with them to give the opportunity to de-register for MLR.

    If you do not receive a letter from HMRC but wish to deregister, you should write to the registration team to let them know. Your letter should include details of your registration number and the reason you wish to deregister.

    The address for applications to deregister is:

    MLR Registration Team
    7th Floor Central
    Alexander House
    Southend on Sea
    Essex
    SS99 1AG

  • 07.06.11 HM Treasury Publish MLR Review

    HM Treasury published its response to the review of the Money Laundering Regulations 2007. It is a consultation document requiring responses to be submitted by 30August 2011.

    It separates itself from the obvious areas from which FATF will review their 40 recommendations such as PEP’s and expansion of the regime. These changes will result in the 4th Directive; however with a proposed implementation date of 1 April 2012 we could be in for two sets of new regulations in a short space of time.

    After going through the document there is lots of discussions. However the main ones are

    • Removal of criminal sanctions
    • Increase supervisor powers to mitigate the risk of the removal of the above
    • Reliance to be extended to all professional bodies in Schedule 3
    • De-minimus exclusion to small businesses of euro 15,000 or below annual turnover
    • UK estate agents selling offshore property to be bought into the Regulations, though not letting agents
    • Powers for all supervisors to impose penalties when not allowed to enter business premises
    • Powers to impose penalties for unreasonable behaviour to provide information
    • Supervisor powers to enforce payment of fees and powers of de-registration
    • More freedom for the exchange of information for supervisors.

    There are a lot of general discussions surrounding policies and procedures and general guidance coupled with the risk based approach and the various sectors. Generally it is perceived that it is not so much as “on the shelf” guidance that does any good but those that promote active participation, the ‘toolkits’, that works. In 7.11 on this subject, I think I can take some pride here, since I believe they may be talking about the one I wrote for one of the supervisors and which is possibly going to adopted by two more.

    In reality the document is a reinforcement of the risk based approach, almost a plea to work in that less rigid way, the end of the tick box approach whilst working without fear of prosecution if we should not always get it right. An approach that can only be undertaken if law enforcement, our supervisors and the regulated businesses themselves work towards the same outcome together. If achieved, it should increase compliance at a reduced cost.

  • 29.01.11 Pilot scheme to give law enforcement agencies access to MSB register

    A new scheme is being piloted to give police and other law enforcement agencies access to information held on HMRC’s Money Service Business (MSBs) register. Under the scheme each month agencies will be given details of all Money Service Businesses in their area held on the MSB register.

    The register is a useful tool for sharing intelligence about businesses which might be used for money laundering and will help HMRC with its work ensuring compliance and supervision of the Money Laundering Regulations. In particular, it will help law enforcement agencies differentiate between MSBs complicit in money laundering or terrorist financing and those who are complying with the Regulations. In a recent case, for example, the manager of a bureau de change was found to be involved in laundering millions of pounds made from drug trafficking.

    If the pilot is successful access to the register will given to law enforcement agencies across the country.

  • 07.09.10 HMRC Guidance – Pakistan floods disaster – guidance on transmitting money

    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.