Money laundering regulation
Governments worldwide see money laundering as a major threat to the market economy. Lawmakers therefore try to prevent criminals accessing professional expertise to reintroduce dirty money into the legitimate economy.
The UK’s anti-money laundering legislation includes the Proceeds of Crime Act 2000, the Terrorism Act 2002, and the Money Laundering Regulations 2007. Most individuals and firms involved in financial matters are to some extent affected by this legislation.
All UK accountants in public practice must be monitored for compliance with the Money Laundering Regulations 2007. As a recognised supervisory authority, the AAT is responsible for supervising its members' compliance.
Find out more
Use the links below to learn more about money laundering regulation. Alternatively, you can download our Quick guide to anti-money laundering legislation or our full Guidance on anti-money laundering legislation
Supervision and monitoring
Who must register for supervision and monitoring?
What will supervision by the AAT involve?
How much will it cost?
Am I eligible to be supervised by the AAT?
What if I am not eligible for supervision by the AAT?
AAT student members
How do I register with the AAT?
The Money Laundering Registration Form
Who should complete the Form?
Who should not complete the Form?
What happens next?
The Money Laundering Regulations 2007 (Regulations) require sole traders and firms to establish and maintain procedures for detecting and deterring money laundering. They also require sole traders and firms to be supervised and monitored in their compliance with the Regulations.
All accountancy practices must be registered with a supervisory authority listed in Schedule 3 of the Regulations or HMRC for this purpose.
The AAT is an officially recognised supervisory authority, along with ACCA, ICAEW, ICAI, ICAS, AIA, ATT, CIMA, CIPFA, CIOT, IAB, ICB and IFA. Each supervisory authority is responsible for supervising its own members.
The AAT has agreed policies with other supervisory authorities to help individuals with concurrent memberships elect just one supervisory authority for their practice. You can download an information sheet setting out these policies below.
Who must register for supervision and monitoring?
Sole traders and firms who provide accountancy, taxation, or related services to clients by way of business (accountants in practice) must register for supervision and monitoring. This is regardless of whether they hold formal qualifications or membership of a professional body.
The only exceptions to this requirement apply to those who provide services:
- to an to an employer only (working in an organisation's accountancy department, for example)
- on a charitable basis, in return for no more than genuine expenses.
What will supervision by the AAT involve?
Supervision is the global term for the AAT's role under the Regulations, of which monitoring members' compliance with the Regulations is just one aspect. Supervision will involve providing guidance, advice, and CPD events.
The monitoring process will be similar to, and where possible, incorporated into the current quality assurance process.
In practical terms, this will consist of telephone and practice visit reviews, arranged in advance and undertaken at a convenient time for members, where possible.
The reviews will look for evidence of appropriate compliance but are not intended to catch members out. The whole ethos of AAT reviews is to provide guidance and support. The reviewers will be able to advise members when they are not doing enough - and when they are doing too much!
There is a cost to supervision, which unavoidably must be passed onto those supervised by the AAT.
The AAT has done its utmost to keep costs down, arriving at a supervision fee of £80. This is payable by each sole trader and principal of a firm regulated by the AAT (except principals providing only administrative support).
However, when you first join our scheme for members in practice you will be charged an introductory fee of £60.
The above fees will be reduced to £20 and £15 respectively for members who qualify for the reduced licence fee.
Am I eligible to be supervised by the AAT?
Both sole traders and firms may register with the AAT for money laundering supervision. However, it is important for the AAT to maintain criteria for membership of firms, to mitigate any risk to professional standards that membership of firms could create.
After considerable reflection, the AAT decided that it will only accept into membership those firms whose principals are all members of one of the supervisory authorities listed above, unless the principals’ activities are confined to providing administrative support to the firm.
The AAT has great regard for experience, and accepts that some practitioners without formal qualification are highly competent. However there is no straightforward way, in the absence of formal qualification and membership, that the requisite standards of competence and integrity can be assured.
What if I am not eligible for supervision by the AAT?
Firms with principals who are not members of any supervisory authority and who provide accountancy services must register with HMRC if they cannot gain membership of a supervisory authority. Visit www.hmrc.org.uk
AAT members who are partners/directors of such firms must, however, still inform the AAT of this position, by completing a Money Laundering Registration Form (the Form) (see the link below)
The AAT may allow membership at a later date if all partners/directors subsequently obtain membership of a supervisory body.
Student members are not eligible for supervision by the AAT and, if not supervised by another body, must be supervised by HM Revenue & Customs (HMRC). For further information on registering with HMRC visit www.hmrc.gov.uk
If you have completed level 4 of the AAT Accounting Qualification you can apply for full membership and join our for member in practice scheme.
As well as benefiting from the recognition and support that MAAT status brings, you may then be eligible for supervision by the AAT.
Visit aat.org.uk/members for more details about AAT full membership.
How do I register with the AAT?
AAT members in practice, whether sole traders or firms, who do not have concurrent membership of another recognised supervisory authority, will automatically be supervised by the AAT.
AAT members who hold concurrent membership of another recognised supervisory authority should elect their sole supervisory authority with reference to the policies agreed between the AAT and other supervisory authorities (see above).
Members must submit a completed Money laundering registration form when applying to become a member in practice.
The Money Laundering Registration Form
As a supervisory authority the AAT must ensure that its members are supervised by an appropriate supervisory authority, even if this is not the AAT.
We therefore need you to provide us with certain information when applying to become a member in practice. You should do this by completing our Money laundering registration form, which you can download below.
Money Laundering Registration Form
Please read the other information on this page before completing the Form.
You should complete the Form when you apply to become an AAT member in practice, whether or not you are:
- a sole trader
- a principal of a firm
- exempt from the members in practice scheme
- to be monitored by another supervisory body.
All AAT partners or directors in firm must complete the Form individually. The Form should only be completed by sole traders, partners and directors (principals).
Who should not complete the Form?
If you provide professional services to an employer only or to clients as an employee of a firm, you should not complete the Form.
When completing the Form, please bear in mind that certain people are not members for the purposes of the Form or the AAT's supervisory role, including:
- AAT student members
- principals of firms who are not members of a supervisory authority and provide only administrative support to the firm (such principals are also excluded for the purposes of calculating the fee payable by a firm).
Submission of the Form does not guarantee registration with the AAT for supervision. It will provide the necessary information that will enable the AAT to ensure that members’ register with an appropriate supervisory authority, whether the AAT or another body.
We will confirm as soon as possible whether you will be monitored by the AAT.
If you have any questions about the Form or any other information on this page, please email us at membersinpractice@aat.org.uk or call us on 0845 863 0788.