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January 2021

Anti Money Laundering Compliance | AML Compliance | Help with Anti Money Laundering | What is AML
Anti Money Laundering (AML) Compliance 758 513 Stepping Stones Accountancy

Anti Money Laundering (AML) Compliance

Anti Money Laundering (AML) is a set of laws and regulations that were formed to prevent criminal activity whereby people disguise legally obtained funds as legitimate income. Whilst AML only actually covers a small range of accountancy transactions and criminal behaviour, the implications of such activity can be incredibly broad.

Why Is AML Important to Accountants?

AML forms a vital part of the accountancy and financial profession; it ensures correct regulation and protection from money laundering. In the past, accountants might have been targeted to aid with these fraudulent transactions. According to the National Crime Agency, money laundering costs the UK over £100 billion every year, however with the implementation of AML compliance only 1% of this is related to applications submitted by accountants. All financial practice firms are required to put controls in place which prevent them from being used as part of a money laundering activity.

Who Does It Apply To?

The AML regulations apply to both accountants and financial professionals that provide the following solutions:

  • Bookkeeping services
  • General accountancy
  • Tax advice
  • Submitting tax returns
  • Business tax advice
  • Auditing

As part of the compliance, accountants should implement:

  • Risk management practices
  • Customer due diligence
  • Reliance and record keeping
  • Monitoring and management of compliance

The 5 Key Stages

In order to complete the AML compliance there are 5 key stages:

  • Identify – make sure you need to be compliant with the AML regulations (for example if you are a member of a supervisory body e.g., ICB, ICAEW or ICPA, then you might already be covered)
  • Collect – ensure you have the right tools in place to safely and correctly collect client data
  • Monitor – be vigilant throughout the relationship with your client, continue to assess all activities
  • Storage – all documentation should be safely secured, correctly filed and easily accessible
  • Report – If any unusual transactions or suspicious activities occur then these should be immediately reported.

If you have any questions in regard to AML or need some accountancy support please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

An Update on MTD | Making Tax Digital | Advice on Making Tax Digital | Accountancy Support with MTD | What is MTD
An Update on Making Tax Digital (MTD) 758 513 Stepping Stones Accountancy

An Update on Making Tax Digital (MTD)

Making Tax Digital (MTD) was first introduced during the Spring Budget of 2015, its aim was to completely negate the need for an annual tax return. Instead, taxpayers would have all their information loaded directly onto a digital tax account. Alongside this, businesses would only have to worry about paying one simple business tax. The other key benefit announced was the simplification of tax for self-employed people along with the complete removal of the class 2 national insurance contribution.

Despite lots of discussion and various communications from HMRC, including a number of consultation papers that addressed various aspects of the MTD project, none of these objectives have been met. Indeed, back in July 2017 there was an announcement that the scheme would be delayed with MTD for income tax being introduced in 2020 and MTD for VAT being introduced in 2019.

As planned the MTD for VAT did commence in April 2019 but with the exclusion of specific businesses (classed as complex), who were delayed until October 2019. It was also decided that specific public sector bodies would also not be joining the scheme until sometime in 2022. The final implementation of the scheme will see a compulsory digital transfer on all VAT data to happen by April 2021 and the mandating of all VAT registered businesses to comply with MTD by April 2022.

If we look at income tax, this digitalisation involved a far more complex structure. The result is that a taxpayer will have to adopt four quarterly reports and a final report that in most cases will replace the annual self-assessment return. A pilot scheme for this was initiated in April 2018 however, there are currently only a small number of taxpayers and agents participating in this pilot and also only 6 of the major software companies (compliant with MTD) that have provision for recording this.

Although planned for 2017, the MTD for corporation tax and complex businesses (defined as large partnerships with income of over £20m or mixed partnerships that include companies, LLP’s and individuals) has yet been introduced. The HMRC issued a specific consultation documentation in November 2020 (https://www.gov.uk/government/consultations/making-tax-digital-for-corporation-tax), however this consultation will run until 5th March 2021, so in reality it is likely that developments within this field will not be seen until later this year.

The final item to note on MTD is that the reporting of corporation tax will be very similar to that of income tax rather than VAT. There will be a quarterly reporting structure for both income and costs. Companies will still need to assign all their accounting totals for iXBRL when submitting annual accounts to HMRC. Therefore, companies within MTD will have to submit 5 reports to HMRC for their annual accounts, along with the standard 4 quarterly VAT returns and relevant PAYE returns

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