22: Help Sheet C Dealing with Errors

Question 1

when defining ‘errors’ we include all errors and mistakes whether they were made by the ____, _____, _____ or __ ____ _____ _____.

Answer 1

client, member, HMRC or any other third party.

Question 2

when should the error be informed to the client?

Answer 2

as soon as the member finds it

Question 3

Introduction to errors: when dealing with errors the member should: (5)

Answer 3

• appropriate advice
• should persuade the client to act with good behaviour
• ensure you aren’t helping or assisting the client in a criminal offense
• discuss with a colleague for a second advice.
• be aware of AML obligations

Question 4

What is the order for dealing with an error the client has informed you of: (4 main points)

Answer 4

1. Ask yourself if it is trivial
2. Do you have permission / authorisation to disclose the error to HMRC?
3. Is the client willing to disclose?
   - You should ask them if they would like to disclose and remind them of the consequences orally
   - If issue still persists, you should remind them again of the consequences again but in writing
4. Cease to act
   - In writing you should cease to act for the client
   - Consider informing HMRC (if necessary)
   - Consider reporting to MLRO
   - Consider making an SAR

Question 5

What should you do if a client comes to you with an error that has occured? (2)

Answer 5

1. Should discuss with the client to remove suspicions

2. If the member is satisfied with the client’s answer, they can continue to act

Question 6

When the client is reluctant to authorise disclosure of the error to HMRC, the member should explain to the client: (3)

Answer 6

• the CONSEQUENCES of a non-disclosure
• the BENEFITS of a voluntary disclosure (e.g. lower penalties)
• the wide ranging powers to obtain information available to HMRC