There have been further developments arising from the changed arrangements introduced by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 which took effect in January 2020. Some time later, in November last year, the SRA announced that as a result of the changed definition of what it now means to be a “tax adviser” in accordance with r.4(2) of the new regime, more firms would now fall under the revised definition, and so would need to become regulated under the anti-money laundering (AML) requirements.
The SRA is now also stressing the need for its records to be updated in relation to those firms that were already regulated for AML purposes but which are now operating as tax advisers in addition to those areas of regulated work that had already been notified to them.
The issue arises because whereas a “tax adviser” was formerly seen as someone who would offer “advice about the tax affairs of other persons” they should now be regarded as such if providing merely “material aid, or assistance or advice, in connection with the tax affairs of other persons, whether provided directly or through a third party”. This has led to the rather confusing position whereby a firm might still exclude liability for tax advice in their practice but be regarded as a tax adviser nonetheless by the SRA.
If yours is one of the practices affected by this, and you have not yet done so, you will need to submit a new form FA10b to the SRA which will advise them of your changed status in relation to being a regulated firm under the AML regime in addition to your other areas of regulated work. If so, you will find the form on the SRA website and will then need to submit it to the SRA having ticked the box at 2.11 in addition to the other areas of work that are regulated at questions 2.1-2.10 which the SRA should already have notice of. You will then probably have no other changes to notify them about.
The form for use in the event that you were not formerly a regulated firm, but now find yourself seen as such by the SRA, is the more detailed FA10. Those firms that might still fall into this category are most likely to be niche practices providing specialist litigation, family or employment advice only, in particular, where there might be tax consequences arising from their client work. If you find yourself in this category you will also need to review your anti-money laundering policy and controls, on which please see the AML Zone section of our website which has now been brought up to date in the light of the changes made by the production of a revised Legal Sector Affinity Group AML Guidance Note at the end of January this year.
If you would like further help and assistance with your money laundering compliance for you would simply like to know a little more about how Infolegal can help your firm to become and remain compliant with legal practice regulation generally, then either phone us on 0203 371 1064 or email firstname.lastname@example.org for further help and assistance.