As I travel around the country talking to members in person and of course on the ‘phone the conversation often turns to the sheer volume of compliance work being placed upon us with the new kid on the block GDPR as well as the staples MTD and of course Money Laundering.
Money Laundering Regulations have been with us for sometime and the recent revamp enshrined in 4MLR has put Risk Assessment at the core of the regulations and we are all reviewing our risk assessment procedures for our practice and of course for our clients both actual and potential.
For some Accountants it seems that Money Laundering has taken a back seat as they try to work out where to spend their available non-chargeable hours and recent respondents to an article on accountingweb show that some believe it’s a waste of time as “nothing is ever done”. I hear accountants say “I’ve submitted loads of SARs and nothing happens so frankly what is the point” and worse still one respondent to the article said “You could have collected at least £20k from ones I have put in if you muppets had bothered to take some action. After which point I can assure you I really can’t be bothered any more, and I am happy to keep my eyes pretty closed unless there is something so big and so obvious I am compelled by fear of a prison term for not putting one in.” OR
“I’ve made a number of SARs re tax evasion, but they’ve been completely ignored by HMRC, even when I’ve handed them the information on a plate, with full details of identity, tax references, dates of transactions, etc. One case alone was tax evasion of around £10k in just a single year. If HMRC can’t be bothered to act on that kind of information, I can’t be bothered to tell them anymore. Like others, I’ll keep my eyes and ears closed in the future!”
Let’s get a couple of things out in the open, if you make a SAR to the NCA unless they require further information you will not receive any information or feedback. You make think nothing is happening but you most certainly cannot be certain so does that mean you should not bother with a SAR is future? Of course not. The NCA state that there are 2 million SARs in their database and approx. 380,000 SARs were submitted in the last year and that £46,375,000 was taken from criminals as a result of SARs.
The ICAEW website contains case studies relating to SARs for example “A SAR reported that a review of a company’s books suggested that significant payments had been made for casual labour without any deductions of tax and national insurance being made. The enquiry revealed that this was not in fact the case, but found there had been other major inconsistencies around expenses. A settlement of over £60k resulted. Although the SAR information did not specifically lead to the eventual outcome of this enquiry, it is highly unlikely that these other issues would have been uncovered without the SAR.” And further “A SAR reported that a manufacturer had deregistered from VAT despite the fact that the turnover remained well in excess of the VAT registration threshold; that the company’s records were incomplete; and that cash sales had been suppressed. The enquiry established from the Corporation Tax returns that its turnover remained well in excess of the turnover limit for VAT. A settlement of over £60k resulted. This successful outcome could not have happened without the SAR information.”
Once a SAR has been submitted if it relates to tax then it is sent immediately to HMRC and as they and the NCA state there really is no such thing as a wasted SAR.
You will not hear any further unless the NCA require additional information, you will not be told what steps have been taken in pursuance of your SAR, you will not be kept advised of any developments based on your report BUT that simply does not mean nothing is being done and this lack of knowledge of action cannot be used in any way as a defence against not keeping an eye open and most definitely as a reason to not make a SAR.
It is our responsibility to report our suspicions and failure to so do could land any Accountant in very hot water and believe me a defence of “I’ve sent loads of SARs in the past and nothing ever happened so I didn’t bother this time” will not help in the slightest.
Money Laundering is a serious offence and we as Accountants have by law to play our part and what we should not do is second-guess the outcome.
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