How to check FCA and AML regulatory requirements

To operate a tax preparation business in the UK legally, you must first confirm whether your services fall under Financial Conduct Authority (FCA) regulation and identify which body will supervise your Anti-Money Laundering (AML) compliance. For most tax practitioners, FCA authorisation is not required unless you offer specific financial advice, but AML supervision is a mandatory legal requirement for everyone in the sector.

1. Determine if you need FCA authorisation

In the UK, providing standard tax advice and filling out self-assessment forms is generally not a "regulated activity." This means you usually don't need to be authorised by the FCA. However, the line is easily crossed if you start offering broader financial services. You will likely need FCA authorisation if you plan to:

• Advise clients on specific investment products (like pensions or stocks).
• Arrange insurance contracts for clients.
• Provide debt counselling or credit-related services.

If your work is strictly limited to tax compliance, accounts preparation, and tax planning, you are likely exempt. You can use the FCA's "Financial Services Register" to check if similar firms are registered or consult their "Perimeter Guidance" manual if you are unsure.

2. Identify your AML supervisor

Under the Money Laundering Regulations, anyone providing tax services must be supervised by a recognised supervisory body. This ensures you have the right systems in place to spot and report suspicious financial activity. You cannot choose your supervisor at random; it depends on your professional affiliations.

If you...	Your AML Supervisor is...
Are a member of a professional body (e.g., ATT, CIOT, ACCA, AAT, ICAEW) and hold a practising certificate with them.	Your Professional Body. They will usually handle your AML supervision as part of your membership.
Are not a member of a recognised professional body or do not hold a practising certificate with one.	HMRC. You are legally required to register with HMRC's AML supervision department before you start trading.

Steps to complete this task

1. Audit your services: Write down exactly what you will offer. If "Investment Advice" is on the list, stop and seek specialist compliance advice regarding the FCA.
2. Check your credentials: If you belong to a professional body, log into their member portal or contact their compliance team to confirm if they act as your AML supervisor for a private practice.
3. Document your decision: Keep a simple note in your business records explaining why you concluded you do (or do not) need FCA authorisation. This shows "professional due diligence" if you are ever audited.

Pro Tip: Even if you aren't regulated by the FCA, you are still subject to the "Consumer Rights Act" and "Data Protection" laws. Don't mistake a lack of FCA oversight for a lack of legal responsibility!

Best Practices

• Stay in your lane: If a client asks for mortgage advice or pension recommendations, refer them to a qualified Independent Financial Adviser (IFA) to avoid accidentally performing regulated activities without a licence.
• Review annually: As your business grows, you might add new services. Re-check these requirements every year during your business planning phase.