If you are a principal in a firm of auditors, external accountants, insolvency practitioners or tax advisers you will need to ensure you are supervised by a supervisory authority to be monitored for compliance with the money laundering legislation.

So if you / your firm is not supervised by the ACCA or ICAEW what are the other options? If you are a member of the CIOT, and a principal in your firm, then the firm can register for CIOT to be its supervisory authority.

Incidentally, CIOT will carry out spot checks on members who are not registered with them to ascertain who is monitoring those tax advisers. CIOT will also visit firms as part of its role as a supervisory authority.

What work is covered by CIOT?

CIOT’s remit is only members / firms working in the tax and accounting sector and to be more specific, according to their helpline, only tax work and other work “subsidiary” to this. So if a firm is performing tax services, accounting work to support the tax comps and a small amount of general business advice, they would probably be able to register with CIOT and then this registration would cover all work, with no need to register with, say, HMRC for non-tax components.

However, CIOT will only allow firms to register in the first place if they meet the above criteria, so as long as the firm is clear on its application, the approval of the application should provide some comfort that all its activities are covered. If the firm is in any doubt then it should obtain further advice.

There is more information on the CIOT website: http://www.tax.org.uk/showarticle.pl?id=6040;n=3810

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David Norris
July 2008