As a Virtual Assistant in the UK, knowing where you stand under the Money Laundering Regulations (MLR) is essential. This post was designed to give you a clear picture of what the rules are â and when you do or donât need to register for supervision.
As a VA, do I need to register for MLR?
The rules can feel complicated, so letâs break it down in simple terms.
What is Anti-Money Laundering Supervision?
Money Laundering Regulations (MLR 2017) are the laws that stop criminals from hiding illegal money.
Put simply, if you are an accountant or bookkeeper, you normally need to register for MLR with HMRC to prove you are following the laws. Most VAs do admin work, not accountancy, but some offer a bit of bookkeeping or invoicing support alongside their other services, and thatâs where things get tricky, because those services can fall under the MLR.
HMRC classify bookkeeping or accountancy as actions taken that alter year-end accounts. Now, if you raise invoices on Sage online, Kashflow, Xero, QuickBooks, and other online accountancy software, then clearly your calculations end up in year-end accounts.
However, if you raise invoices manually (for example, in a Word document), they get entered into year-end accounts by the bookkeeper/accountant/the client themselves, not by you. So, in this instance, you should be able to do this without registering; however, you cannot advertise âbookkeeping servicesâ as this falls under the MLR regulations.
The VA Concession (The âExemptionâ)
Back in 2017, when MLR first appeared, there was a panic in the VA community, as many VAs perform bookkeeping tasks alongside the services they offer. It would be a huge cost to register for MLR, just to do the odd piece of invoicing.
Together with VAPromag, we approached HMRC with this issue, and after lots of too-ing and fro-ing, they agreed to issue a VA Exemption.
Under the VA Exemption, you do not need to register for MLR supervision if you meet all of these conditions:
- Being a VA is your main business (not an accountant in disguise!).
- Your turnover is ÂŁ30,000 or less per year.
- Bookkeeping/accountancy work is less than 5% of your total income.
- The bookkeeping is just supporting your VA services, not a main service you advertise.
- You donât offer any other service thatâs regulated under the Money Laundering rules.
- Any bookkeeping work you do is checked by a registered accountant or bookkeeper who is supervised.
If you tick all six boxes, you donât need to register â but you do still need to tell HMRC that you qualify. Keep a copy of your email to them as proof.
Note: If you are granted the VA Exemption you can not advertise that you offer Invoicing, Bookkeeping or Accountancy Services.
You can find out more about this on the gov.uk website here.
What If You Donât Qualify for the VA Exemption?
If you donât meet all the criteria for the VA concession â even if itâs just one condition that you miss â you will need to register for AML supervision. In practice, this means signing up with HMRCâs scheme, or with a professional body if youâre already a member of one. Once registered, you must have proper systems in place, such as checking your clientsâ identity, keeping records of any risks, and, in some cases, appointing a Money Laundering Reporting Officer. There are fees to pay for registration, and youâll also need to renew it each year.
What Should You Do Right Now?
The first step is to look at your business numbers. Work out how much of your income comes from bookkeeping, and check whether your overall turnover is below the ÂŁ30,000 threshold. With that information, decide whether you meet the criteria for the concession. If you do, email HMRC to confirm and make sure you keep a copy of their acknowledgement for your records. If you donât qualify, then youâll need to go ahead and register for supervision. Itâs also important to revisit this every year â if your business grows or you take on more bookkeeping, your situation could change.
Why It Matters
Failing to get this right can lead to fines, penalties, and even problems with your insurance if youâre found to be working outside the regulations. The good news is that once you understand the rules, the decision is very straightforward. If bookkeeping is only a small extra service you provide alongside your VA work, you can usually claim the exemption. But if bookkeeping is a more significant part of your business, then you should register properly to stay compliant and protect your business.