The Proceeds of Crime Act 2002 contains three principal money laundering offences: concealing or transferring criminal property (section 327), becoming concerned in an arrangement that helps someone else deal with it (section 328), and acquiring, using or possessing it (section 329). Each carries up to 14 years’ imprisonment, applies to anyone, not just the regulated sector, and can be committed on suspicion alone, which is how accountants who never handle cash can still be caught.

What are the three principal offences?

Section Conduct Typical accountancy risk
327: concealing Concealing, disguising, converting or transferring criminal property, or removing it from England and Wales, Scotland or Northern Ireland Moving funds through a client account; presenting transactions so their true source is hidden
328: arranging Entering into or becoming concerned in an arrangement the person knows or suspects facilitates the acquisition, retention, use or control of criminal property by or for another person Advising on or implementing structures, transactions or returns that help a client keep or use the proceeds of crime
329: acquisition, use and possession Acquiring, using or having possession of criminal property Holding client money or receiving fees paid out of criminal property

Section 327(3) adds that concealing or disguising includes concealing or disguising the property’s nature, source, location, disposition, movement or ownership, or any rights in it. Under section 334(1) each offence is punishable on indictment by up to 14 years’ imprisonment, a fine or both. By comparison, the reporting offences in sections 330 to 332 carry up to five years.

Unlike the failure to report offence, the principal offences are not limited to the regulated sector. They apply to anyone, including an unregulated bookkeeper, an employee in a finance team or a business owner.

What makes property criminal property?

Section 340 sets very wide definitions:

  • Criminal conduct is conduct that is an offence anywhere in the UK, or would be if it occurred here (section 340(2)). There is no minimum seriousness and no minimum amount.
  • Criminal property is property that constitutes or represents a person’s benefit from criminal conduct, in whole or in part, directly or indirectly, where the alleged offender knows or suspects that it does (section 340(3)).
  • It does not matter who carried out the conduct or who benefited (section 340(4)). A person who launders the proceeds of their own crime is caught.
  • A pecuniary advantage counts as a sum of money equal to its value (section 340(6)), and property means all property wherever situated, including money and intangible rights (section 340(9)).

Tax evasion is the predicate offence accountants meet most often. Being knowingly concerned in the fraudulent evasion of income tax is an offence under section 106A of the Taxes Management Act 1970, and the equivalent VAT offence is in section 72 of the VAT Act 1994. Tax deliberately not paid is a pecuniary advantage, so the money kept by the evader can be criminal property even though no stolen funds ever changed hands. Tax avoidance that is lawful is different; see tax avoidance and tax evasion.

How low is the threshold for suspicion?

The mental element for all three offences is knowledge or suspicion. ICAEW explains that the leading test comes from R v Da Silva [2006] EWCA Crim 1654: a person suspects if they think there is a possibility, which is more than fanciful, that the relevant facts exist, while a vague feeling of unease would not suffice. That low threshold is why accountants who press on with work after noticing something odd can find themselves inside section 328, even though they took no money and gained nothing beyond their normal fee.

How can the arranging offence catch an accountant?

Section 328 is the offence most relevant to advisers because it focuses on facilitating someone else’s dealings with criminal property, “by whatever means”. An accountant who suspects that a client’s business is a vehicle for undeclared income or fraud and then helps restructure the business, prepares documents for a sale, sets up a company or trust, or implements a refinancing could be concerned in an arrangement that helps the client retain, use or control the proceeds.

Ordinary compliance work does not automatically become arranging just because a client has a tax irregularity. The question is whether the firm’s work facilitates the acquisition, retention, use or control of the criminal property. Where it does, the firm needs to stop or obtain a defence before going further. A disclosure made after the act is a defence only if there was a reasonable excuse for not making it first (section 338(3)).

Can receiving fees or holding client money be an offence?

Yes, potentially, under section 329. A firm that receives fees it suspects are paid from criminal property acquires that property, and a firm that holds suspect funds in its client account possesses it. Section 329(2)(c) gives a defence where the property was acquired, used or possessed for adequate consideration, which normally covers a fair fee for genuine work. But section 329(3) narrows this: consideration is inadequate if its value is significantly less than the value of the property, and the provision of goods or services that the person knows or suspects may help another to carry out criminal conduct is not consideration at all.

The adequate consideration defence exists only in section 329. It is no answer to a charge under section 327 or 328, so a firm paid properly for work that facilitates a client’s laundering is still exposed under the arranging offence.

What defences are available?

  • Authorised disclosure. Each section provides a defence where the person makes an authorised disclosure under section 338 and, if the disclosure is made before the act, has the appropriate consent. Section 338 allows a disclosure before the act, during it if the person only became suspicious part way through and discloses on their own initiative as soon as practicable, or after it if there was a reasonable excuse for not disclosing first. Inside a firm, the disclosure goes to the MLRO, who seeks consent from the National Crime Agency. How that works is covered in defence against money laundering requests.
  • Reasonable excuse. A person who intended to make an authorised disclosure but had a reasonable excuse for not doing so has a defence.
  • Overseas conduct. There is no offence where the person knows or reasonably believes the conduct occurred abroad and was lawful there, unless it is of a prescribed description.
  • Exiting and mixed property exemptions. Since 2023, regulated businesses can return client property worth less than £3,000 when ending a relationship, provided customer due diligence has been done, and can operate accounts containing some unidentifiable criminal funds as long as the criminal portion is preserved (sections 327(2D) and (2F), 328(6) and (8), 329(2D) and 339A(6A)).

Section 338(4) provides that an authorised disclosure does not breach any restriction on disclosure, however imposed, so client confidentiality is not a reason to stay silent. The privilege reporting exemption does not help here either: it only protects against the failure to report offence. See the privilege reporting exemption.

How do the principal offences relate to the reporting offences?

Section 340(11) defines money laundering as an act that is an offence under sections 327 to 329, or an attempt, conspiracy or incitement to commit one, or aiding, abetting, counselling or procuring one. The reporting duty in section 330 is triggered by knowledge or suspicion that another person is engaged in money laundering in that sense. So the same facts usually raise two questions at once: must the firm report the client, and would the firm itself commit a principal offence if it carried on? The first is answered by a suspicious activity report; the second may need consent before the firm acts.

How might this play out?

Illustration only. A client company asks its accountants to act on the sale of its trade and assets and to receive the sale proceeds into the firm’s client account before distributing them to the shareholders. During due diligence the accountants find that for several years cash takings were kept off the books and corporation tax and VAT were not paid on them.

  1. The firm now suspects that part of the business value and the cash built up from it represent the benefit of tax evasion, so they are criminal property.
  2. Helping complete the sale could be becoming concerned in an arrangement under section 328, and receiving and paying out the proceeds could be transferring criminal property under section 327 and possessing it under section 329.
  3. Preparing the completion accounts for a fair fee does not remove the section 327 and 328 risks, because adequate consideration is only a defence under section 329.
  4. The member reports internally, and the MLRO makes a report seeking consent before any further step that would be a prohibited act, while making sure nothing is said that could amount to tipping off.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.