PracticeAccounting FirmsClients set to return after money laundering changes

Clients set to return after money laundering changes

Accountants to win more clients from lawyers due to altered regulations

Accountants are set to win more clients due to new money laundering
privileges for the profession, leading tax advisers claimed.

PKF tax investigations partner John Cassidy said some clients would now
choose accounting advisers over lawyers following the Privy Council’s approval
of alterations to money laundering laws, giving accountants the same legal
privilege as lawyers when they encounter suspicious transactions.

‘I had seen cases where potential clients had gone to lawyers instead of
accountants,’ said Cassidy. ‘Now a factor in a client’s choice of adviser has
been taken away.’

Andrew Watt, head of investigations at tax advisory firm Chiltern, said it
was ‘fair to speculate’ that clients would have chosen to use lawyers’ services
over accountants because of the privilege issue in the past.

‘I have seen a firm of lawyers marketing to clients that they can speak to
them within “a privileged environment”,’ said Watt.

But he voiced concerns that tax investigators without accounting
qualifications might not be able to use privilege when working with clients.

Watt said that a meeting of the ICAEW’s tax investigations group would look
at establishing the new privilege limits.

‘There are a large number of tax advisers who are not accountants, but
working in practices. Would they be covered by privilege?’

The government amended the Proceeds of Crime Act 2002 and the Money
Laundering Regulations 2003 to extend the privilege and bring UK law in line
with a European directive.

Accounting institutes have warned that the extension of privilege to the
profession, to bring it onto a par with lawyers and solicitors, was limited.

ICAEW money laundering working party chairman Karen Silcock said that it was
a ‘specific change’ relating to qualified accountants’ knowledge or suspicion of
money laundering.

Accountants fought for equal rights for more than 18 months, overcoming
opposition from the legal profession.

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