MLR - The Book-keepers Forum (UK)

RuthA · Senior Member

MLR

Stuartbham · Senior Member

Hi Ruth

I started off trying to get paper copies of ID and proof of address, but quite often I'd forget and it basically became a bit of a hassle (probably down to my lazyness more than anything else disbelief

).

I now use the TaxCalc AML Search and Verify service. Not the cheapest solution but very easy to use. Saves me quite a bit of time.

Stuart

MartinP · Member

I looked at online services, but I generally just get information from the client and sometimes do a voters role check (not ltd) online.

Martin

Quentin Pain · Senior Member

The most crucial thing is not to annoy your client. Any serious money launderer will cover their tracks more quickly than any useless legislation we all have to cope with, but as usual, the government must be seen to be doing something.

Remember this, if you prospective client is using a UK bank account, they will have already been through these checks (* see below). You of course are still obliged to do it all again, but just remember that if, by some incredible million to one chance, you do take on the bookwork of a terrorist (stop chuckling in the background), then their bank will also have problems too!

* Existing customers are for some reason exempt from having to prove they are not terrorists (remember MLR was brought in with the so called 'War on Terror'). That is, we didn't all have to go to our bank and prove who we were! Doesn't that just sum up how stupid this scheme is? OK. Rant over.

RuthA · Senior Member

I'm really glad you posted that Quentin!

What worries me is that I might not have the correct piece of paper on file and that ultimately I might get into trouble for that. Which seems a bit daft.

Quentin Pain · Senior Member

Yes. I recommend doing the minimum required. The bottom line is that HMRC are asking you to keep an eye on any unusual activity. By that I would guess that if your client's turnover spikes (upwards), then you should dig a little deeper to ensure that the transaction makes sense.

The downside is that your client may not want to disclose their business deals (and nor should they too - client confidentiality, data protection etc etc) but if you point out that MLR regs oblige you to get as much information as possible, then maybe they might like to reassure you. All you need to do is make a note that you did what you could.

People, as we all know, tend to be privat and it would not take much to anger someone by being over-zealous, so take the Dale Carnegie approach (How to Win Friends and Influence People). BTW, if you have not read that book, I highly recommend it. This world would be so much better if everyone followed its advice.

ICBUK · Guru

Hello,

I wouldn't put too much on the bank account, as Quentin says not all your clients would have gone through checks, I know a personal friend of mine opened her self employed business bank last year and was never asked for anything.

Your an ICB member so I guess you have had the forms? (I know a lot to read :) )

That should help tell you what kind of ID you need, as it is based on the risk of the client.

Don't forget you have unlimited MLR support with the ICB so if in doubt call or email mlr@bookkeepers.org.uk

RuthA · Senior Member

Thanks James, I spoke to Ray at the ICB on Friday, he was very helpful.

I was thinking I might design myself a one-side aide memoire or something, since the manual is so extensive!! Maybe that's part of the reason I'm feeling nervous, I worry that I've missed some small but vital piece of information in the huge folder. Until now all my clients have been very straightforward in terms of due diligence but in the last week I've taken on two new ones where things are a bit more tricky (eg a partner I won't ever meet) so I was having to ensure I knew what I was doing in a different situation.

ICBUK · Guru

Yeah that's the problem with MLR :)

The ICB is working on software which you can use to answer some questions and then it will give you a risk assessment which will tell you what you need for the client.

You can then make amendments as you go along.

Another benefit to this software is it will automatically fill out your annual report to the ICB.

It should be released in January.

Peasie · Expert

ICBUK wrote:
The ICB is working on software which you can use to answer some questions and then it will give you a risk assessment which will tell you what you need for the client.

I've to see someone (possibly even this evening) regarding filling in their self assessment form. He is on CIS so there will be next to nothing involved in it. I have to ask him for proof of identity. This person I have known all my life. He was best man at my brother's wedding. His father grew up with my father. His grandfather grew up with my grandfather. This is going to prove an awkward moment when I ask him to prove his identity.

Filling in the forms for MLR will probably take longer than his self assessment form.

RuthA · Senior Member

One of my new clients used to play golf with my husband when they were tennagers, it would have been handy to be able to put that down as proof of ID lol!!

James, the software sounds very helpful.

semsley · Guru

I have a client I started working for in 1984 (we met when our children were at the same nursery and she and her husband were just starting a business)not only are they clients but also old friends, how crazy is it that after all those years I had to ask for proof of identity etc.

Peasie · Expert

How did you go about explaining to them?
Luckily the weather has saved me for another night. He didn't get home till 7pm because of the snow.

semsley · Guru

The usual - stupid bureaucracy, what will they think of next, putting the world to rights.

Quentin Pain · Senior Member

I bought a game for my son today as part of his Xmas present list, then discovered that I should have bought the strategy guide instead. I went back to the shop (within 30 minutes) for a refund and they asked for proof of identity, driving licence or passport.

I told them where to go (in the nicest possible way) and they gave me the refund without further question. This is a great example of using stuff like the 'War on Terror' as propaganda to bring in Draconian measures that have no impact on anything other than to make people distrust other people. The kid in the shop was only about 18. This kind of stuff worries me more than anything else.

James, how about the ICB, which after all is a body that represents the profession, start taking a stand against all this nonsense?

Peasie · Expert

Quentin Pain wrote:
James, how about the ICB, which after all is a body that represents the profession, start taking a stand against all this nonsense?

Why would they want to do that?

How many people have joined the ICB BECAUSE of the MLR?

Where is this country going? I mean, you hear these stories of pensioners being refused alcohol as the don't have proof of ID. Or someone that does have ID can't buy drink at a supermarket if they have someone underage with them at the time they are buying it.

ICBUK · Guru

Hi Guys,

Oh believe me the ICB is the most outspoken about MLR and how it should be done.

MLR was not just about terrorist funding, but mainly tax avoidance.

I guess the ICB is split, on the one hand MLR compliance can be a handfull, on the other it does want all bookkeepers and accountants to be registered with a professional body.

To help with the compliance, the ICB produces a manual, forms and checklists, and gives its members full MLR support. Last time I checked it was the only body to do this. And it does it for free (to Practicing Members). So it is on your side to help.

I think Quentin's example is a bit daft. To those of you working with family members, this would affect your risk assessment so therefore you might not need the same type of ID checks. Read the ICB manual or call 0845 060 2345 or email mlr@bookkeepers.org.uk for advice. (having seen the size of the manual I guess you will all call or email biggrin

)

RuthA · Senior Member

Peasie, I've just been checking, and if you have met with the person you can satisfy the requirements with a non photo form of ID and a proof of address.

A letter from HMRC can be the ID (I should imagine they will give you at least one of them with the self assessment stuff).

A file note to say you have been to the address is all you need for proof of address.

So maybe better than you were thinking?

RuthA · Senior Member

I do think it's a shame that if MLR is seen as being all about filling in forms and ticking boxes the reasons behind it all - the ongoing assessment of risk that involves taking a holistic view and being alert and aware - may become secondary or even be lost.

I'm off to see a new client in a minute. Her 'story' is absolutely right, she has a website and email address and premises that fit in exactly, she is an osteopath and having visited one myself we have spoken about what they do and I have no doubt she genuinely does what she says she does....they and various other things are the reason why I regard her as low risk for money laundering. But that doesn't really fit on the forms

I wonder if a paragraph to be written in assessing the risk might be more helpful than some of the tick boxes?

Wella · Expert

Haven't confirmed this exactly but i beleive that if it a one off transaction, with no regular business association and ith a value of less than EUR15000, then due diligence checks are not required. Read it recently on HMRC site.

Bill

PS Off for a while visiting the wrinklies, so have fun with out me. I'll be back next week

Quentin Pain · Senior Member

James, if MLR was mostly about tax avoidance, HMRC would not:

a) Have sold off most of OUR fixed assets [HMRC land and buildings] to George Soros to be leased back (check out George Monbiot's various articles on this sorry affair in the Guardian).
b) The UK would not be associated with many tax haven's. See the incredible expose on Dispatches: http://www.channel4.com/programmes/dispatches/episode-guide/series-72/episode-1
c) Would not have produced such a complicated set of laws that PAYS people to look into ways to avoid tax.

That is reality James. And it is not very pleasant.

Peasie · Expert

I wonder if he was tipped off by my brother as he didn't seem at all surprised when I mentioned I would need proof of identity. He just went into his wallet and got out his driving licence. The only thing he was surprised at was when I said I'd need to keep a record of it for six years. (ICB rules). I took a photo of it on my phone. It's transferred on to my computer so when I've got it safely copied elsewhere I'll delete it off my phone.

ICBUK · Guru

Hi guys,

The HM Treasury say you have to keep ID for 5 years, the ICB added the extra year as HMRC can go back 6 years, I guess they are just playing it safe for the sake of an extra year.

Well Quentin, probably too political for me to answer on behalf of the ICB biggrin

However, the examples and case studies the HM Treasury gave for AMLR back in 2006-2007 were all about tax avoidance, apart from two which were drug smuggling. I don't think any of them were about terroism.

An interesting note is that some of those case studies were overlooked/missed by the accountant but picked up by the bookkeeper

semsley · Guru

As tax avoidance is legal I can't see why or how AMLR comes into the equation. Surely it is tax evasion of which we should be aware.