New UK Money Laundering Regulations May Mar Relations Between Clients And Tax Advisers

by Robin Pilgrim, LawAndTax-News.com, London

31 October 2003

Freelance group, Shout 99 has warned that the UK's Proceeds of Crime Act 2002, and the forthcoming Money Laundering Regulations 2003 are likely to sour the relationship between tax advisers and their clients.

In a report released on Thursday, the industry body, which represents the UK's contractors, explained that for the purposes of the legislation:

"Money laundering now includes possessing, or in any way dealing with, or concealing, the proceeds of any crime. This is a very wide definition." It went on to add that:

"Professional bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW) have tried in vain to persuade the government to introduce a de-minimis level below which reporting is not required."

However, these attempts have been unsuccessful, and accountants are likely to be required to report any suspicions at all regarding their clients, a situation which is likely to overwhelm the National Criminal Intelligence Service (NCIS).

According to Shout 99:

"These new regulations are likely to make clients less willing to admit to any past indiscretions or errors, because even an error that was made in all innocence becomes a money laundering matter if it is not rectified once it becomes known at a later date that the error was made. We are likely to see more situations where clients use different advisers to ensure that no one adviser is aware of the complete picture."

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