This is one of the rare appeals to be heard by the First-tier Tribunal where the subject of appeal is not about tax.
The Money Laundering Regulations 2007 (Regulations) require a relevant business to register with a supervisory authority, so as to establish and maintain procedures for detecting and deterring money laundering. HMRC is a supervisory authority under the Regulations. As a consequence, accountancy practices that are not regulated by a recognised professional accountancy body, must register with HMRC for this purpose. The registration applies to sole traders and firms as well, that provide accountancy, taxation, or related services to clients by way of business (accountants in practice). As qualified accountants are regulated by the respective professional body, registration with HMRC effectively has the effect of bringing unqualified accountants under some form of regulation. Exemptions from registration apply only to those who provide services to an employer (working in an organisation’s accountancy department, for example) or on a charitable basis, in return for no more than genuine expenses.
In this case a person trading as an external accountant fitting the definition of the term ‘external accountant’ within the Regulations carried on business as an accountant from 8 November 2010 and did not send an application to HMRC for registration with the applicable fee until 3March 2011. On 24 March 2011, HMRC issued a notice of penalty for 137.49, where £37 comprised the registration fee and £100 the penal charges. The appellant contended that there was nothing on the HMRC website to confirm the time allowed for registration. HMRC argued that the relevant information about the time period for registration (should be done before business commences) was available on the HMRC website, and was not “impossible” to find, and that the website provided e-mail and postal contacts for obtaining further guidance. Ignorance of the law was no excuse.
Whilst the tribunal was prepared to assume that the appellant might not have found the HMRC website too user-friendly, it was not persuaded to accept that a person exercising all reasonable steps and all due diligence would not have found the relevant information without unreasonable effort, either from the HMRC website, or by other means. The appeal was dismissed.
