Tipping off is the offence, under section 333A of the Proceeds of Crime Act 2002, of disclosing that a suspicious activity report has been made, or that a money laundering investigation is contemplated or under way, where the disclosure is likely to prejudice an investigation. A separate offence in section 342 covers anyone who prejudices an investigation they know about, including by destroying documents. For accountants the practical challenge is dealing normally with a client after a report without letting anything slip.

What exactly is the tipping off offence?

Section 333A creates two offences, both limited to information that came to the person in the course of a business in the regulated sector, which includes accountancy and tax work.

  • Disclosing a report. Under section 333A(1) and (2), it is an offence to disclose that you or someone else has made a disclosure under Part 7 to a constable, an HMRC officer, a nominated officer or an authorised NCA officer, where your disclosure is likely to prejudice any investigation that might follow. An internal report to the firm’s MLRO counts as well as an external report to the NCA.
  • Disclosing an investigation. Under section 333A(3), it is an offence to disclose that an investigation into a money laundering offence is being contemplated or carried out, where that is likely to prejudice the investigation.

The maximum penalty is two years’ imprisonment on indictment, or three months on summary conviction (section 333A(4)). Section 333D(3) and (4) give a defence where the person did not know or suspect that the disclosure was likely to prejudice an investigation.

Disclosure is not limited to saying “we have reported you”. Hints, a changed tone in a letter, an unexplained refusal that points to a report, or leaving a copy of a report on a file the client can see could all amount to disclosing the matter.

How is prejudicing an investigation different?

Section 342 applies to anyone, not just the regulated sector, who knows or suspects that an officer is acting, or proposing to act, in a money laundering, confiscation, civil recovery or similar investigation. It is an offence to make a disclosure likely to prejudice the investigation, or to falsify, conceal, destroy or otherwise dispose of relevant documents, or to cause or permit that. The maximum penalty is five years on indictment (section 342(7)).

Two points are important for practices. First, section 342(3)(ba) removes the disclosure limb where the disclosure is of a matter within section 333A and the information came from regulated sector work, so the two offences do not double up. Second, the document limb has no such carve out. Once an accountant knows of an investigation, shredding a client file under a routine retention policy, or letting the client take original records away to “tidy them up”, could be an offence. Section 342(6) gives a defence where the person does not know or suspect the documents are relevant, or does not intend to conceal facts from the investigator. Retention duties are covered in AML record keeping.

Which disclosures are permitted?

Sections 333B to 333D list disclosures that do not breach section 333A:

  • Within the firm (section 333B(1)): an employee, officer or partner may tell another employee, officer or partner of the same undertaking. Internal discussion is allowed, but should be kept to those who need to know.
  • Between connected advisers (section 333B(4)): relevant professional advisers in different undertakings that share common ownership, management or control, in the UK or an equivalent jurisdiction.
  • Between advisers of the same kind (section 333C): for example from one accountant to another, where the disclosure relates to a client or transaction involving both, is made only to prevent a money laundering offence, and both are subject to equivalent duties of confidentiality and data protection.
  • To the supervisor or law enforcement (section 333D(1)): to the firm’s AML supervisor, or for the detection, investigation or prosecution of crime.
  • Dissuading the client (section 333D(2)): a relevant professional adviser may tell their client something for the purpose of dissuading the client from conduct amounting to an offence.
  • Moratorium extensions (section 333D(1A)): where law enforcement applies to court to extend a moratorium on a defence against money laundering request, the firm may tell a client who appears to have an interest in the property that the application has been made, and nothing more.

The section 333C route is narrow and is not a general licence to warn a successor accountant. ICAEW’s guidance on professional clearance takes a stricter line, covered below.

Can I still ask the client questions?

Yes. HMRC’s guidance says that tactful enquiries about the background to a transaction that is out of line with the normal pattern are prudent practice, form part of customer due diligence and should not give rise to tipping off. ICAEW’s helpsheet makes the same point: pointing out anomalies, omissions or errors is normal professional work. If you find an invoice missing from a client’s records, ask about it.

The limits are that questions should stay within the scope of the engagement, should not turn into an investigation, and should avoid accusations or suggestions of guilt. ICAEW also confirms that advising a client, orally and in writing, about the consequences of undeclared income is permitted because it is aimed at dissuading them from an offence.

How should the firm handle the client after a report?

ICAEW expects a firm to reassess the relationship after a report. The choices are usually to continue, with enhanced monitoring, or to disengage. Either way:

  • Keep normal service. A sudden change of manager, delays or a cold tone may alert the client. Only those who need to know should know about the report.
  • Check whether a DAML is needed before doing anything that might facilitate the use of criminal property, such as paying away funds from client account or completing a transaction.
  • Disengage on neutral grounds. ICAEW’s guidance is that if a client will not correct a known error after written advice, the firm would ordinarily cease to act and consider a report, without telling the client about the report. A disengagement letter can refer to a breakdown in the relationship or disagreement over the tax position.
  • Answer professional clearance carefully. ICAEW Code paragraph R320.7B says an outgoing accountant who has made a report must not disclose that fact to the prospective accountant. The reply should avoid questions about money laundering suspicion but can give factual statements, such as “we disagreed over the VAT position” or “we were unhappy submitting the accounts as instructed”. See professional clearance when changing accountant.
  • Handle subject access requests with care. If the client asks for their personal data, the ICO’s guidance allows information to be withheld under the crime and taxation exemption only to the extent that disclosure is likely to prejudice the prevention or detection of crime, judged case by case. Where saying that an exemption has been applied would itself prejudice its purpose, the response may be more general.

Reasons for resigning need thought. ICAEW notes that if the police approach the firm about a client who is not yet aware of the investigation, giving that as the reason for resigning could be tipping off; if the client is already clearly involved, the risk is lower.

How might this play out?

Illustration only. A tax senior notices that a client’s rental income from a second property has not been declared for three years. The client says HMRC will never find out. The senior tells the MLRO, who submits a report. The partner then writes to the client explaining the penalties and the advantages of a voluntary disclosure, which is permitted dissuasion. The client refuses. The firm sends a disengagement letter citing disagreement over the treatment of the rental income and stops work. Three weeks later a new accountant writes for clearance. The partner replies that there was a disagreement about rental income and that the firm was not prepared to file returns on the client’s basis, and says nothing about the report. The MLRO keeps the report and file notes on a restricted file, not on the client file.

What are the common mistakes?

  • Telling a client “our compliance team has flagged this” or “we have to report this”.
  • Copying the MLRO’s notes onto the client file, which may later be handed over.
  • Mentioning suspicions in a clearance letter, or refusing to reply in a way that signals a report.
  • Disposing of records after learning of an investigation.
  • Over correcting and refusing to ask ordinary questions; normal enquiries within the engagement are expected.

Background on when reports are required is in suspicious activity reports for accountants.

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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.