What are the MLR-2017 obligations for UK accountants in 2026?

Under the Money Laundering Regulations 2017 (MLR-2017), UK accountancy practices must perform Customer Due Diligence (CDD) at the start of every new client engagement, Enhanced Due Diligence (EDD) where the risk is high (politically exposed persons, sanctioned individuals, complex corporate structures, non-cooperative jurisdictions), and ongoing monitoring of the relationship throughout the engagement. Supervisory bodies are ICAEW, ACCA, AAT, CIMA, depending on the practice's regulator.

CDD requires identifying the client and verifying their identity to a reasonable standard. For corporate clients, this includes identifying beneficial owners (defined as individuals with >=25% effective ownership or control under reg 5(1)(a)) and verifying their identity to a comparable standard. For individuals, the standard is photo ID + proof of address. For corporates, the practice must walk the PSC tree to identify UBOs, verify each UBO's identity, and screen them against sanctions + PEP + adverse-media sources.

EDD lifts the bar where a risk-factor applies. Practical examples: a non-UK client where the source-of-funds is unclear; a corporate client with layered ownership ending in a non-cooperative jurisdiction; a PEP family-member or close-associate. EDD typically requires senior-management sign-off + additional verification (source-of-funds documentation, enhanced media search, regulator dialogue if needed).

Ongoing monitoring is the most-missed obligation. Practices must re-screen clients periodically (annually at minimum, more frequently for high-risk clients) and capture material changes — a UBO becoming a PEP, a director appointed to a Warning Listed firm, a sanctions designation against a beneficial owner. The Stratum monitoring tier ($19.99/mo for 100 clients) automates the daily re-screen + alert.

Source: HMRC MLR-2017 Guidance for Accountants

Last updated 2026-05-06.