The appellant, a small accountancy practice, had a client base of approximately 75 clients including three main clients, and a turnover of approximately £50,000. In April 2014, HM Revenue and Customs (HMRC) undertook a money laundering compliance visit.

HMRC asked the appellant’s sole professional (NB) how he checked and verified the identity of the appellant’s clients. NB replied that following an initial interview with the client at which the client provided him with identification details and residency details he registered them with HMRC via the online tax agent system. The appellant therefore relied on the receipt of the tax agent authorisation code issued by HMRC, and as he had known his clients for many years no further checks were made. NB said he was unable to provide a record of the checks undertaken, as he had not maintained a record.

HMRC stated that the appellant was not doing enough to meet the