I do the books for an ex-colleague of mine who runs her own business. My question is, as a book-keeper, is your job to enter all the expenditure your client is claiming even though you know (not even suspect) that the expenditure is not genuine business expenditure?
I'm guessing that the liability for what is claimed ultimately lies with the client not the person entering the figures but I want to be sure!
First thing to come to mind is MLR !! and from one of your previous posts this evening, I assume you are a member of ICB, you would have received that very thick folder on Money Laundering Regulations !! you have a moral and professional dilemma I think.
Personally I would not enter anything that you know for sure is not a direct business expense.
Hi Alex, I agree with Julie, you should not enter anything that is not a business expense.
I think you should fully familiarise yourself with the money laundering regulations for your own benefit as a bookkeeper, as you could potentially have a serious compliance issue here.
Thanks for the responses. I am aware of the money laundering regs and am trying to wade through the folder! I clearly need to talk to the client - I guess I just wanted to establish that that was the right approach.
I am concerned however about how far to take it. The client in question has a large number of expenses, and obviously I am unable to ask her about every one I am unsure of. There are a few that are clearly dodgy, but should I be asking for justification for everything? To be fair to her this is her first year of trading and she is possibly not too clued up about what she can and cannot claim. I have a reasonable understanding of what is claimable but is there any online or HMRC resource that I can point her to to clarify which areas of her expenses are legitimate, which might back me up?
In the circumstances that you describe, I think that you should ask your client to justify her expenses if you are abit suspicious about whether they are direct business expenses. This is to safeguard yourself against breaching the money laundering regulations as you could end up being prosecuted. I think these regulations put alot of pressure now on bookkeepers and also I think many self employed bookkeepers and people thinking about becoming self employed bookkeepers don't fully realise the implications of these regulations.
Thanks for those replies - all good stuff. I am actually going to a CPD event next week about MLR so hopefully this will make it all a bit clearer still. I agree with the last comment - it is very easy not to realise what you are laying yourslef open to.
