AML for Bookkeepers and Virtual Assistants: Are You in Scope?

Bookkeepers are often surprised to learn that they sit inside the UK's anti-money laundering rules. You do not need to be a qualified accountant, run a practice with staff, or handle client money for the Money Laundering Regulations 2017 to apply to you. If you keep books for other people as a business, HMRC treats you as an accountancy service provider. This guide explains who is caught, who is not, what you have to do, and how virtual assistants and payroll providers fit in. It sits alongside our guide to HMRC AML supervision and registration.

Is bookkeeping in scope?

Yes. HMRC's guidance on registration lists professional bookkeeping among the services that bring a business into scope, alongside preparing and signing accounts, customer-specific tax advice and helping to complete tax returns. The test is whether you record, review, analyse, calculate or report on financial information for others as a business. HMRC also says that providing these services virtually, or through automated systems, still requires customer due diligence. Working remotely from a laptop for clients you have never met is not an exemption.

Do you register with HMRC, or with a professional body?

That depends on who supervises you. A bookkeeper who is supervised for anti-money laundering by a listed professional body, such as the Institute of Certified Bookkeepers or the Institute of Accountants and Bookkeepers, does not need to register with HMRC. A bookkeeper who is not supervised by a body must register with HMRC. HMRC notes that businesses which do not need to register must still follow anti-money laundering policies, so being supervised elsewhere does not switch the obligations off.

HMRC also lists situations where no registration is needed, including non-commercial work such as advice given within your own organisation, generic tax information that is the same for everyone, and cases where all of your customers are themselves supervised accountancy providers or FCA-supervised banks and strict conditions are met, including a written contract covering all anti-money laundering requirements.

Virtual assistants

A virtual assistant who does some bookkeeping may not need to register, but only if all of the following apply:

• Virtual assistance is your main business.
• Your annual turnover is under £30,000.
• No more than 5% of your turnover comes from accountancy services.
• The accountancy work supports your main business.
• You have no other activity that requires registration.
• An accountant or bookkeeper who is registered for supervision reviews your work.

You must contact HMRC with a declaration and keep a copy. If you stop meeting any of the criteria, you must apply to register. A virtual assistant who takes on a few regular bookkeeping clients can cross the 5% line quickly, so check your figures at least once a year.

Payroll providers

Payroll work that calculates tax liability, earnings or payments to a business's employees is in scope according to HMRC's Economic Crime Supervision Handbook. Third-party payroll providers are outside the definition only in narrow cases, such as providing software or hardware support without analysing financial information, paying invoiced fees to self-employed people or other providers, operating as an umbrella or managed service company, or doing payroll as a minor part of a recruitment or HR business. If you do more than that, assume you are in scope and check with HMRC.

What you actually have to do

Once you are in scope, the duties are the same in principle as for a larger firm, scaled to your size and risk:

• Assess your risk. Write down the money laundering and terrorist financing risks of your clients, services and the way you work. Our guide to AML policies, controls and procedures shows what to include.
• Carry out customer due diligence. Identify and verify each new client and any beneficial owners, understand what the business does, and keep monitoring the relationship. The KYC checklist for onboarding a new client is a practical starting point.
• Report suspicions. If you know or suspect that a client is involved in money laundering, you must report it and must not tip the client off.
• Train and keep records. Make sure anyone who helps you understands the rules, and keep your records for the period your supervisor requires.

Under regulation 21(6) of the Regulations, the duty to appoint a compliance officer and a nominated officer does not apply to an individual who neither employs nor acts in association with any other person. That reduces the paperwork for a genuine one-person business, but it does not remove the duties above.

Situations that deserve a second look

Bookkeepers see the raw transactions, which is exactly where odd patterns show up. These are not tests with fixed thresholds, just prompts for professional judgement:

• A client who cannot produce invoices, bank statements or contracts to support entries you are asked to record.
• Income that does not match the business you were told about, or large cash receipts with no explanation.
• Requests to backdate entries, split payments or route money through other entities for no obvious reason.
• Money passing through the client's accounts to people or countries with no clear link to the business.

If something does not add up, ask. If the answers do not help, follow your reporting procedure and note your reasoning.

Frequently asked questions

Do I need to register if I only keep books for friends and family?

If you do it as a business, for fees, you are within the rules. Non-commercial help that is not provided by way of business is outside them, but be careful with informal arrangements that grow over time.

Do I need registration if my professional body already supervises me?

No. Bookkeepers supervised by a listed body such as the Institute of Certified Bookkeepers or the Institute of Accountants and Bookkeepers do not register with HMRC, but the anti-money laundering rules still apply to you.

Where can I get training?

See Learnsignal's CPD courses for finance professionals for AML and financial crime training.