Choosing and registering with an AML supervisor

Every accountancy, bookkeeping and tax practice caught by the Money Laundering Regulations 2017 must have one anti money laundering supervisor: either a professional body listed in Schedule 1 to the Regulations or, if no such body supervises it, HMRC. In practice the supervisor follows the ownership and membership of the firm rather than a free choice, and a firm that trades without supervision risks penalties and prosecution.

Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.

See my price in 2 questions How the cover works Accountant? Offer cover to your clients or call 01795 841 310

Which bodies can supervise an accountancy practice?

Regulation 7 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) names the supervisory authorities. Under regulation 7(1)(b), each professional body listed in Schedule 1 supervises relevant persons who are its members or who are regulated or supervised by it. Under regulation 7(1)(c)(iv), HMRC supervises auditors, external accountants and tax advisers who are not supervised by one of those professional bodies.

The Schedule 1 bodies most relevant to accountancy and tax work are:

Association of Accounting Technicians (AAT) and Association of Chartered Certified Accountants (ACCA);
Association of International Accountants and Association of Taxation Technicians;
Chartered Institute of Management Accountants and Chartered Institute of Taxation;
Institute of Certified Bookkeepers and Institute of Accountants and Bookkeepers;
ICAEW, Chartered Accountants Ireland (ICAI) and ICAS;
Institute of Financial Accountants.

The professional bodies are themselves overseen by OPBAS, the Office for Professional Body Anti Money Laundering Supervision, which sits within the FCA and oversees 25 professional body supervisors across the legal and accountancy sectors. OPBAS does not supervise individual firms or HMRC.

Which body will supervise my firm?

Supervision follows membership and the professional body’s practising regime. ACCA’s published rules give a clear example: ACCA supervises a firm where one or more ACCA practising certificate holders have combined majority control of more than 50%, and it automatically supervises sole practitioners who hold an ACCA practising certificate. In ACCA’s own example, a three partner firm where one ACCA holder has 40% and two ICAEW holders have 30% each falls under ICAEW supervision. Where control is split equally between members of different bodies, the bodies decide between them and confirm the position to the firm.

That approach reflects regulation 7(2) to (4). Where a firm has more than one possible supervisor, they may agree that one of them acts, and that body must notify the firm or publish the agreement. Without an agreement, the supervisors must cooperate.

If no principal holds a practising certificate or equivalent with a supervising body, the firm falls to HMRC. ACCA says members who provide accountancy services without a practising certificate, including those offering only bookkeeping, will be asked to regularise their position by registering with HMRC. The detail of HMRC supervision is covered in HMRC as AML supervisor.

Run an accountancy or bookkeeping practice? Solar Protect runs fee protection schemes for practices, so the cost of dealing with an HMRC enquiry into a client is covered rather than written off.

See how our accountant schemes work or call 01795 841 310.

Does my business need a supervisor at all?

Regulation 11(c) defines an external accountant as a firm or sole practitioner who by way of business provides accountancy services to other persons. Regulation 11(d) defines a tax adviser as one who by way of business provides material aid, assistance or advice in connection with the tax affairs of other persons, directly or through a third party. HMRC’s guidance treats professional bookkeeping, accounts preparation, help with tax returns and client specific tax advice as accountancy services, and includes payroll agents who provide accountancy or tax advice.

HMRC lists limited situations where registration is not needed:

accountancy or tax work done on a non commercial basis within your own organisation;
generic tax information that would be the same for everyone;
a virtual assistant concession, where every condition is met, including turnover below £30,000, accountancy work being no more than 5% of turnover and the work being reviewed by a supervised accountant or bookkeeper;
a subcontractor whose customers are all supervised accountancy service providers or FCA supervised banks, provided it does not deal directly with their clients, is included in their AML controls, reporting and training, and has a written contract with each customer covering AML requirements.

How does registration work?

With a professional body, supervision normally comes with the firm’s practising certificate or firm registration. Bodies then collect information to risk assess the firm: ACCA, for example, requires an AML annual return because regulation 17(1) obliges it to risk assess its supervised population, and it expects firms to tell it of changes such as a new money laundering reporting officer, a new beneficial owner, officer or manager, or the firm no longer falling under ACCA supervision.

With HMRC, the firm applies through HMRC’s online service using a Government Gateway account or GOV.UK One Login and pays the fees at the same time. An accountancy service provider may carry on business while its application, including approval checks on its owners and managers, is being decided. Under regulation 59(2) HMRC must give notice of its decision within 45 days of receiving the application or any further information it asked for.

Whichever route applies, each beneficial owner, officer and manager needs approval under regulation 26, explained in approval of owners and managers under Regulation 26. A firm that also provides trust or company services must be on HMRC’s register of trust or company service providers kept under regulation 54. ICAEW, for example, adds its firms to that register when they declare such work on their annual return.

What happens if a firm trades without supervision?

HMRC states that a business must not trade without registering and that trading while unregistered is a criminal offence which may lead to a penalty or prosecution. HMRC’s guidance on penalties adds that a prosecution for breaching the Regulations can lead to an unlimited fine, up to two years in prison or both, and that a court may treat the whole turnover from regulated activity during a period of unregistered trading as the proceeds of crime. ACCA says all cases of members failing to register with an AML supervisor will be dealt with by a disciplinary outcome.

There are knock on effects with other businesses too. HMRC expects supervised businesses to check that a regulated counterparty is supervised, and its registration guidance says a business should not enter a business relationship with another business that should be registered and is not, and should report it to HMRC.

Can a practice change supervisor?

Changes usually follow a change in ownership, such as a retirement, merger or sale. Because supervision attaches to the owners’ practising arrangements, the new supervisor should be in place before the old one ends, so that there is no gap. If a firm moves to HMRC and later stops doing regulated work, HMRC expects it to deregister. If HMRC cancels a registration, including for unpaid annual fees, the business pays the one off application fee again when it reapplies.

Is the supervisor going to change anyway?

In October 2025 the Government announced that the FCA will take over AML supervision of accountancy service providers, legal service providers and trust or company service providers. The FCA says nothing changes immediately, firms should keep following their current supervisor’s processes, and it does not expect to begin taking on supervision until autumn 2028, with transition likely to complete around 2030. The plans are covered in AML supervision reform and the FCA.

What does this look like in practice?

Illustration only. A limited company practice has two directors. Anna holds an ACCA practising certificate and owns 60% of the shares; Ben is unqualified and owns 40%. ACCA supervises the firm because a practising certificate holder has majority control, and both directors need regulation 26 approval through ACCA. Anna then retires and sells her shares to Ben. No principal now holds a practising certificate with a supervising body, so before the sale completes Ben arranges HMRC registration, pays the application, premises and approval fees, and tells ACCA that the firm is leaving its supervision.

What mistakes do firms make?

Assuming that membership of a body as a student or affiliate means the firm is supervised by that body.
Treating bookkeeping only or payroll work as outside the Regulations without checking HMRC’s narrow exemptions.
Forgetting the separate trust or company service provider register when the firm acts as registered office or forms companies.
Changing ownership without telling the supervisor, or without approval for the new owners.
Letting an HMRC registration lapse by missing the annual fee. For the wider framework see customer due diligence for accountants and what to expect from an AML supervisory review.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.