UK Government Consults On Extending Money Laundering Exemptions To Accountants

by Robin Pilgrim, LawAndTax-News.com, London

09 August 2004

The UK Home Office has hinted that it may extend a 'professional privilege' exemption currently enjoyed by lawyers under the country's anti-money laundering laws to accountants and tax advisers.

Under the new legislation, professional intermediaries are obliged to report clients to the Inland Revenue if they suspect that tax evasion has taken place, and to the National Criminal Intelligence Service if they suspect that the client has been involved in money laundering activity. Professionals who fail to make suspicious activity reports face prosecution themselves.

However, if a client is on the verge of making good a mistake in tax reporting, lawyers are exempted from the requirement to report them to the authorities under privilege rules. According to reports in the national media last week, the Home Office has launched a consultation proposing the extension of this exemption to "other relevant professional advisers".

Speaking to the Accountancy Age news service last week, Karen Silcock, chairman of the Institute of Chartered Accountants in England and Wales' money laundering working party announced that:

"We are delighted that the Home Office has taken this step, and hope that it results in a rapid change in the law. The changes now under discussion have the potential to remove inequalitites, to the benefit of both clients and advisers, without harming the flow of valuable anti-money laundering intelligence to the authorities."

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