payment method - opinion of other accountants requested

[yorkshirejames]

I am purchasing an item from a friend (it is a hobby-related item that he has owned for 20 years, so is definitely a chattel). When we discussed methods of payment, he asked whether I would mind doing a balance transfer to his credit card, to clear part of his debt there.

Now, I have no issue in paying by any method he wants (I expected cash) but I just wanted to ask the other accountants here whether there is any kind of money laundering angle to this (paying off someone elses credit card I mean)?

I should really know the answer myself, but sometimes opinions from others are needed to be sure.

Thanks

[Geoff T]

I'm no beanie - but how well do you know this person yj?

[Imbercal]

The money laundering angle depends on whether or not/how he declares it. You need a bit more information to give a fully qualified answer, but assuming he declares the income he receives from you then there's no issues at all.

[KidsBeeHappy]

If he's a friend, and you weren't a beancounter, would you be down the tax office looking up money laundring regs?

If the money laundering regs now apply to every person in the UK, in social situations, then I truely hang my head in dispair at the amount of bearucratic legislative red tape garbage that this country has managed to shove through the legal system in the last decade under the guise of "counter terrorism".

[David Griffiths]

My view is that there's no question of money laundering angle because the transaction has nothing to do with your business as an accountant.

Even if it were business connected, I don't see any problem with it. A credit card is basically an overdrawn bank account and there wouldn't be any problem in paying to a current account.

It also seems to be the sale of a private item, so something that doesn't need to be "declared" to anybody. Yes, chattels are subject to CGT if the gain is more than £6,000 but even then it's not your concern if he advises HMRC or not.

[Zeno]

My view is that there's no question of money laundering angle because the transaction has nothing to do with your business as an accountant.

I am afraid that is not how I understand it. My view is that the money laundering regulations are basically part of the ethical standards that accountants are held to. If you uncover a reportable event or suspcious activity in your personal life I believe you have the same duty to report it.

Of course, I do not think that this applies to James & his friend. Definetely is an unusual transaction though - why not not just give him cash which he can use to pay the card as he sees's fit? (Does the friend not trust himself not to gamble it or blow it on hookers?)

I bet you might find some who might deem it suspicious activity...

[Geoff T]

I bet you might find some who might deem it suspicious activity...

Hence the question of "knowledge" I asked...

WHAT they do with the cash isn't your problem James, as long as you're comfortable they've not got 'plosive type stuff under the bed - or an order in for same... payable via the c/card...

[David Griffiths]

I am afraid that is not how I understand it. My view is that the money laundering regulations are basically part of the ethical standards that accountants are held to. If you uncover a reportable event or suspcious activity in your personal life I believe you have the same duty to report it.
.

That's at variance with our Money Laundering Manual as provided by Mercia

Information about a crime that comes to you in the course of your job is potentially reportable. Information that comes to you, as say part of your social life, is not reportable.

However, any information that you receive about possible terrorist activities must be reported, as there are primary legislative requirements to report suspicions of money laundering linked to terrorism.

[yorkshirejames]

I'm no beanie - but how well do you know this person yj?

Very well indeed.

The money laundering angle depends on whether or not/how he declares it. You need a bit more information to give a fully qualified answer, but assuming he declares the income he receives from you then there's no issues at all.

If it is a chattel, why would it need to be declared at all (and to whom)?

Thanks to all for their responses thus far.

[Jenni384]

I can't see any problem from a MLR angle.

I agree with David (sorry Zeno) that information received not while working in the regulated sector, i.e. in your personal life, is not reportable.

Don't see why he can't just receive cash/cheque and pay that onto his credit card though. However as long as you're satisfied you're making a one off payment, you receieve the goods, and he is satisfied that the transaction is concluded it should be ok. I say should be. It does sound odd! :)

[Zeno]

That's at variance with our Money Laundering Manual as provided by Mercia

I don't doubt it. Most of the various money laundering information & experts I have come across are at variance with each other.

Does the second part of the paragraph you reported not contradict the first a little? I mean, how in your social life would you exactly come across evidence of money laundering that you knew was being used to finance terrorism? I doubt Al Queada would be holding a flag day in a pub.

[David Griffiths]

The regulations themselves make it clear that they apply only to persons acting in the course of business.

3 (1) Subject to regulation 4, these Regulations apply to the following persons acting in the course of business carried on by them in the United Kingdom (“relevant persons”)—

On your interpretation every time that somebody up the pub mentioned that he had a job at home done for cash, you'd have to make a report. Perhaps you do - I don't want to know.

[Geoff T]

I'm no beanie - but how well do you know this person yj?

[quote=yorkshirejames;1179096]Very well indeed./quote]

MLR covered then - no probs...

If you can vouch for them, no worries...

[KidsBeeHappy]

The regulations themselves make it clear that they apply only to persons acting in the course of business.



On your interpretation every time that somebody up the pub mentioned that he had a job at home done for cash, you'd have to make a report. Perhaps you do - I don't want to know.

Ditto. When that happens I would like to check out of this planet! Can someone please tell me how this is supposed to counter terrorism ? - because that's the excused that was used to pass all these crappy OTT instrusive big brother laws.

[yorkshirejames]

Thanks all.