Money laundering switch affects tax professionals

Date: 17th July 2009

The Chartered Institute of Taxation (CIOT) has updated its anti-money laundering advice for small business accountants and other tax advisers.

In a new report, the organisation confirmed that it had adopted the guidance offered by the Consultative Committee of Accountancy Bodies (CCAB) as its main advice for members.

This guidance is also used by other professional bodies as well as UK courts - and has been approved by the Treasury.

Money laundering can occur through criminal actions relating to the tax affairs of an adviser's client.

This commonly happens when the customer intentionally understates business losses - or, alternatively, overstates their expenses.

However, CCAB's own guidance points out that genuine mistakes made by the clients in "good faith" are not to be counted as money laundering.

The CIOT report stated: "Members who are supervised by another supervisory authority [apart from CCAB] will need to take account of the guidance issued by that authority."

It added: "Members who are lawyers (even if they are acting as tax advisers) should consult the guidance issued by the professional body governing their legal qualification."