The New Rules And What Is Happening Now

Under the new money laundering regulations (MLRs) that came into force on 15 December 2007, Accountancy Services Providers have to be supervised by a designated professional body in order to carry on trading. If they are not already supervised by a designated professional body, they need to be registered with HMRC.

Therefore, unregulated accountancy service providers, (believed to be some 40,000 providers according to the IFA) are required to register with the taxman or risk not being able to trade by the 1 October 2008.

What Could This Mean For Business Owners And Taxpayers?

Whilst the new money laundering regulations is a vital step in the fight against criminal activities and protect the public against the growing number of unregulated accountants in the small business market, Jonathan Amponsah of A M P Associates asserts that taxpayers and business owners need to be aware of the implications of their most trusted advisers being policed by the taxman. He comments:

"The taxman has always had enormous powers to collect the "right amount of taxes". He has the power to raid in on bank accounts, to force estate agents to reveal details of landlords and to use other sneaky ways to obtain information.

He will now have the powers to regulate and supervise certain "accountants". The very same people who are supposed to stand up to him and defend their clients. Could this turn accountants into "yes men" and weaken their position to fight their clients' corners"?

The Good News

The good news is not all accountants will be supervised by the Revenue. Members of the major chartered and certified accountancy bodies and other financial bodies will continue to maintain their independent status.

It will now be more important than ever for taxpayers and business owners to ask the right questions to ensure that their advisers are qualified and regulated by a reputable independent professional body.