From Charles Jarrett
Am I missing something? I haven't seen any press comment – or letters – concerning a dramatic change that is set to impact self-certification.
The new Money Laundering Regulations 2003 and amendments to the Proceeds of Crime Act 2002 and Terrorism Act 2000 are poised to come into effect in January 2004.
Ruth Kelly, financial secretary to the Treasury, has confirmed that the government is sticking to its view that there should be no minimum reporting threshold in the regulations and that tax evasion should be regarded as a serious criminal offence.
She has also made it clear that the government proposes to give no ground in the face of appeals from accountancy bodies that legal professional privilege, currently available only to lawyers, should be extended to cover accountants dealing with cases of suspected tax evasion.
The effect of this is that any accountant or solicitor who suspects there may be some tax evasion taking place now has a duty to report this to the National Criminal Intelligence Service or they risk committing a criminal offence themselves. And accountants can't hide behind professional privilege.
I wonder what the long-term implications of all this might be? Some solicitors will report to the NCIS any self-certification clients on the grounds that they are not declaring all their income – evading tax. Many won't bother but could face a prison sentence for not reporting what could reasonably be suspected as possible tax evasion.
Of course, many accountants will be affected, but what of lenders? The Money Laundering Officers appointed in each firm now face the possibility of criminal charges if they don't report suspected tax evasion as well as suspicious deposits of large cash.
Any views from lenders, accountants or solicitors on this underdiscussed subject would be most welcome and, I hope, illuminating.