AML Checks for Accountants in the UK: The Complete Compliance Guide

AML checks for accountants in the UK are the customer due diligence, screening and monitoring steps an accountancy firm runs to confirm who its clients are and to spot money laundering risk. Required under the Money Laundering Regulations 2017 (as amended), these checks cover identity verification, PEP and sanctions screening, ongoing monitoring, and reporting suspicious activity to the National Crime Agency.

A lot rides on accountants in the UK's financial system. Their work keeps the economy moving, and that same proximity to client money makes the profession a target for criminals who want to wash dirty cash through a respectable name. Getting these checks right is a professional duty, and it is what separates a firm that sails through an HMRC supervisory inspection from one that walks away with a penalty.

What follows covers the laws that apply, the eight core checks every firm should run, the mechanics of PEP and sanctions screening, and the rule changes landing in 2026.

AML Regulations for Accountants in the UK

Sitting close to the money that moves through the economy puts UK accountants on the front line of financial transparency. A handful of laws and regulations shape what anti-money laundering (AML) and counter-terrorist financing actually require of them. Here is the short version.

Two statutes anchor the whole framework: the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000, which set out the core offenses around money laundering and terrorist funding. Sitting on top of them, the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, usually shortened to "the Regulations," spell out what businesses have to do, Trust and Company Service Providers (TCSPs) included.

Several other pieces of legislation fill in the gaps. Law enforcement powers were widened by the Criminal Finances Act 2017, which also tackled tax evasion head-on. Asset freezes for people tied to terrorism fall under the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. Older measures, the Anti-terrorism, Crime, and Security Act 2001 and the Counter-terrorism Act 2008, round out the defences against terrorist financing.

Reporting threads through all of it. Suspect something illicit, and you are obliged to report it. POCA and the Terrorism Act 2000 both lean hard on this duty, and the trap works in two directions: stay silent when you should speak, or tip someone off that a report has gone in, and either one can land you with an offense of your own.

HM Treasury holds the power to freeze the assets of individuals or groups thought to be involved in terrorism. Anyone subject to financial sanctions appears on a list maintained by the Office of Financial Sanctions Implementation (OFSI), and accountants are expected to know that list and screen against it.

Supervision falls to HMRC (Her Majesty's Revenue and Customs), which checks that businesses follow the UK's AML rules and can pull information for tax purposes along the way.

Know these laws. A firm that does not risks waving money laundering or terrorist financing straight through without realising. Keeping current and compliant is a professional obligation, and it is one of the more meaningful ways an accountant helps protect the UK's financial system.

Who Supervises AML Compliance for Accountants?

Every accountancy firm caught by the Regulations needs an AML supervisor. Which one you answer to comes down to your professional membership.

Professional bodies take on most of the supervisory work. Members of the Institute of Chartered Accountants in England and Wales (ICAEW), the Association of Chartered Certified Accountants (ACCA) and the Association of Accounting Technicians (AAT) answer to their own institute. Belong to none of the approved professional bodies, and HMRC supervises you directly instead.

Your supervisor sets the bar, inspects your controls, and steps in when those controls fall short. So knowing who watches over your firm, and what they want to see, is where any compliance program begins. It also points you to the guidance written for your own sector, such as the anti-money laundering guidance for the accountancy sector published with the Consultative Committee of Accountancy Bodies (CCAB).

Essential AML Checks for Accountants in the UK

Compliance with AML regulations is not optional for any UK accountant. Here is what that responsibility looks like in practice.

• Customer checks: Vet every client properly up front, then keep watching how they behave once they are on the books.
• PEP identification: Some clients, or the people close to them, turn out to be politically exposed persons (PEPs). Spot them, and handle the relationship with extra care.
• Nominated officer: One named person should own incoming reports of suspicious activity and act as the line to the National Crime Agency.
• Staff training: Your team is your first line of defence, so make sure they can recognise the warning signs and understand why raising a concern matters.
• Record keeping: Document transactions and client interactions thoroughly, and keep those records current.
• Policy review: Policies and procedures drift out of date fast, which means revisiting them on a regular cycle to stay within the rules.
• Compliance monitoring: Put processes in place that confirm those policies are actually being followed, not just written down.
• [Transaction Monitoring](/transaction-monitoring-software): Large or odd transactions with no obvious commercial logic deserve a second look.
• New business risks: A new product or technology carries its own money laundering exposure, so weigh that risk and contain it before you roll anything out.

Work through that list, and a UK accountant does their part to head off financial crime and keep the financial system transparent.

How Customer Due Diligence (CDD) Works for Accountants

Customer due diligence sits at the center of every AML program. Regulation 28 of the Money Laundering Regulations 2017 sets the baseline: identify the client, verify that identity, and work out who the beneficial owners are behind any business client. That is the floor, not the ceiling.

With an individual, you are typically gathering a full name, date of birth and registered address, then checking those details against reliable evidence. Identity is settled by a passport or driving licence. Address is easy enough to confirm with a recent utility bill or bank statement.

Corporate clients are messier. Now you need company registration details, the names of directors, and the individuals who ultimately own or control the business. Beneficial ownership is where the real risk tends to hide, because a few layers of holding companies can blur who is genuinely calling the shots.

CDD is not a one-off. It starts at the point of engagement and runs for as long as the relationship lasts. A new owner appears. Maybe the client shifts into a different jurisdiction, or sends through an instruction that does not square with what you thought you knew about them. Every one of those moments is a prompt to look again.

Higher-risk clients and transactions call for enhanced due diligence (EDD), which layers on extra work: establishing where the funds came from and digging deeper into the client's background. EDD is the expected standard for high-risk jurisdictions and for politically exposed persons.

Book an AML screening demo to see how automated CDD and risk scoring fit an accountancy workflow.

PEP and Sanctions Screening in AML

Screening compares your client against external risk lists. For accountants, two of those lists carry the most weight: sanctions and politically exposed persons.

Sanctions screening confirms a client is not subject to economic or trade restrictions, and is not closely tied to anyone who is. Governments and international bodies publish these lists to restrict individuals, companies and countries linked to terrorism, corruption or money laundering. The OFSI consolidated list is the primary reference point in the UK.

PEP screening asks a different question: does the client, a beneficial owner, or a related party hold a prominent public position? Think a government official, a senior figure inside a state-owned enterprise, or someone closely connected to either. None of this makes a PEP a criminal. The label flags a heightened risk of bribery or corruption, and that is reason enough to give the relationship a closer look.

Neither check stops at onboarding. Sanction screening and PEP checks run the length of the client life cycle, at the point of engagement, through periodic reviews, and as ongoing monitoring that catches a change in status. A client who looks clean today can surface on a list tomorrow, which is exactly why screening once and moving on does not hold up.

Plenty of firms bolt on adverse media screening as well, scanning news, court records and regulatory announcements for the kind of negative coverage a sanctions or PEP list has not caught up with yet.

Ongoing Monitoring and Transaction Review

Onboarding a client is not the finish line for AML compliance. Ongoing monitoring keeps the relationship under review, so shifts in behavior, ownership or jurisdiction get caught as they happen rather than months later.

How much scrutiny a given client attracts comes down to a risk-based approach. Lower-risk clients might sit on lighter-touch monitoring with longer gaps between reviews. The higher-risk ones earn more frequent checks, deeper verification, and a written rationale for whatever level of attention you have settled on.

Transaction review feeds into this too. Keep an eye out for activity that is unusually large or complex, or that carries no obvious business rationale. A sudden spike that does not fit the client you thought you knew is a cue to dig in, and maybe to file a report.

Doing all of this by hand across a full client book is slow, and bits of it slip through. Automate the rescreening and the alerts, though, and a status change surfaces fast instead of waiting around for next year's review.

Reporting Suspicious Activity: SARs and the NCA

Know or suspect that a client is mixed up in money laundering, and the law obliges you to report it. The mechanism is a Suspicious Activity Report (SAR), filed with the UK Financial Intelligence Unit, which sits within the National Crime Agency.

For UK law enforcement, SARs are a major intelligence stream. More than 850,000 SARs reach the UKFIU each year from banks, accountants, solicitors, estate agents and other regulated professionals. A solid report, submitted promptly through the NCA's online portal, does far more good than a vague one that arrives late.

Two things trip firms up. The duty to report can bite even when you are not certain, as long as your suspicion is reasonable. And tipping off, the act of warning a client that a report has gone in, is a separate criminal offense in its own right. Drill your team on both.

This is the nominated officer's territory, usually the Money Laundering Reporting Officer (MLRO). They take in concerns raised internally, judge whether a Suspicious Activity Report is warranted, and serve as the firm's link to the NCA.

What Is Changing in 2026

The UK's AML rules are being refined, not rebuilt. After HM Treasury responded to its earlier consultation, a statutory instrument amending the Money Laundering Regulations 2017 was laid before Parliament on 25 March 2026. Expect most of it to take effect around late June or early July 2026, with a few elements not landing until 2027.

These amendments are targeted. The aim is to sharpen definitions, reinforce the risk-based approach, and strip out unnecessary over-compliance, rather than tear up the framework and start over.

Two of the changes deserve an accountant's attention. The trigger for enhanced due diligence is being tightened, so mandatory EDD zeroes in on transactions that are unusually complex or unusually large, plus jurisdictions named on the Financial Action Task Force call-for-action list. Separately, the Financial Conduct Authority published final guidance on 7 July 2025 telling firms to treat UK domestic PEPs as lower risk by default, unless other risk factors say otherwise.

Where is all this heading? Toward proportionality. Effort should track risk, easing the friction on low-risk clients and concentrating it where it actually counts.

How KYC Hub Supports AML Checks for Accountants

Running these checks by hand across a growing client book gets harder every year. KYC Hub's AML screening and monitoring solution pulls the whole process into one place, onboarding through to ongoing review.

Screening comes first. The platform runs exhaustive AML screening against global sanctions and PEP data, so a client meets the lists that matter before you ever take them on. From there, continuous monitoring and AML alerts keep that client under watch, surfacing a status change instead of letting it sit until the annual refresh. Global adverse media intelligence pulls in the negative-news coverage that static lists tend to miss. Network intelligence goes after the connections buried inside complex ownership structures. And because the data coverage is genuinely global, the same workflow holds up whether your client sits in Manchester or moves money across three continents.

For an accountancy firm, the payoff is concrete: onboarding that moves faster, cleaner audit trails when HMRC comes knocking, fewer manual checks to chase down. Book an AML screening demo to see how it fits your firm.