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HMRC internal manual

Money Laundering Regulations: Compliance

Accountancy Service Providers (ASPs): How do ASPs operate?

ASPs are usually approached by clients who will ask them to carry out work. It is usual for an initial engagement meeting to take place where the extent of the services required are discussed and terms are agreed. In deciding whether to act an ASP will usually ask questions regarding any previous trading history, find out about who previously provided the ASP services requested and may approach the previous ASP for information about the tax history of the client. If the service required involves the submission of tax returns and corresponding with HMRC, the client will sign a form 64-8 which authorises the ASP to act on their behalf when dealing with HMRC.

It is usual for an ASP to maintain a file for each of their clients which will record basic information such as names, addresses and phone numbers. This file should contain details of any identity checks carried out on the client as part of anti money laundering customer due diligence checks.

In addition the ASP should have a file that contains the working papers relating to the client. Depending on the sophistication of the ASP and the accounting procedures at the client’s business this may be held wholly or in part in computerised form.

The relationship between an ASP and the client is very much governed by the need of the client. For example, a bookkeeper, stocktaker or payroll agent will be in contact frequently with the client because their services are needed on a regular basis. This is likely to involve visits to the trading premises of the client. An accountant or tax adviser is likely (unless engaged to do VAT work where returns are either monthly or quarterly) to visit the client only once or twice a year if they have only been instructed to prepare annual returns and/or accounts.

It is likely that the majority of clients that an ASP has will either live, or have their business, reasonably local to where the ASP operates from. Exceptions to this might be cases where a long standing client has moved away but wishes to continue the relationship or the ASP has moved but maintains links in his/her former area. Long distance clients with no obvious connection to an ASP are higher risk and additional controls ought to be in place to mitigate the risk.