HMRC updates AML risk guidance for accountancy service providers

HMRC has updated its risk assessment and guidance for accountancy service providers within its supervisory remit.

HMRC notes that:

• the 2025 NRA assessed ASP services as high risk for money laundering – noting that criminals will try to misuse services that have inadequate or weak systems and controls – and that some ASPs offer other services equally seen as high risk, like trust or company services, bookkeeping and payroll;
• the 2025 NRA assessed ASPs as being at low risk for terrorist financing purposes;
• in relation to proliferation financing, criminals wanting to set up a company in the UK for the purposes of proliferation finance might engage an ASP to help them draw up accounts, notarise documents or set up a bank account;
• a number of risks will be common to ASPs, and should be considered and addressed appropriately:
  • a request or business activity without a clear business reason or that does not make economic sense;
  • customers or services from or linked to a high-risk third country;
  • customer or service from or linked to another overseas jurisdiction;
  • providing accountancy services alongside other services such as financial, legal or trust or company services;
  • supply chains;
  • dealing with businesses, customers or intermediaries that have no AML supervision – or are not supervised when they should be;
  • services requested for an entity that appears to be dormant or a shell company;
  • services where there is no face-to-face interaction;
  • services paid for in cash or to customers with cash intensive businesses;
  • frequent changes to beneficial owners, directors or shareholders;
  • relationships with professional enablers who may be seeking to exploit weaknesses;
  • significant changes to customer business;
  • unrestricted deposits and withdrawals by clients using client accounts;
  • restricted access to business premises or premises that don’t seem appropriate;
  • providing services to businesses in financial difficulties which may be vulnerable to exploitation;
  • customers operating in industries or using practices that are not familiar to the ASP, or operating in a sector that is associated with potential exploitation;
  • customers using different ASPs without any good reason; and
  • secretive customers.

The assessment also specifically warns of the risks of:

• preparing accounts, completing returns or preparing other records from incomplete records or sources;
• unusual levels of requests for references for borrowing where there is no clear reason for the need for the loan or where the loan is repaid early;
• customers putting on pressure or taking risks to reduce tax bills;
• falsified payroll instructions – such as using illicit funds to pay employees or fabricating employees;
• unusual service requests when providing payroll services;
• indicators of payroll fraud;
• customer businesses being at risk of modern slavery or human trafficking;
• customers who may be, for instance, contractors or agency workers, who are employed by umbrella companies that may be fraudulent; and
• when audit services are provided alongside other services.