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Uncertainty about whether anti-money laundering scheme applies to general practice

by Julie Griffiths
31 August 2022

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GP practices may have to register as a trust by 1 September under an anti-money laundering initiative, LMCs have warned.

New rules were introduced by the Government in 2020 as part of the UK’s implementation of the EU’s Fifth Money Laundering Directive.  

Under the Trust Registration Service (TRS) rules, which were implemented as part of the directive, it may be that practices have to take action.   

But even though the deadline is 1 September, it is unclear whether the scheme applies to GP practices.

Kent LMC said in a newsletter that ‘it has been indicated’ that GP surgeries, PCN bank accounts and ‘shares held in a GP provider type company’ may be required to register as ‘Trusts’ by 1 September.

It said that HMRC is still clarifying some of its guidance and has ‘not yet stated if it is intended that GP surgeries will have to comply with these rules’.

The newsletter added that the GP Committee was aware of the potential unintended consequences of this legislation and ‘it is expected that representation be made that GPs, as public bodies, should be exempted’.

It said: ‘Whilst practices may wish to take advice from their accountants, the LMC believes it is not necessary for practices to take any action regarding the formation of Trusts at this point until further guidance is issued’.

However, a bulletin from Cleveland LMC said that if practices were uncertain about whether they need to register with the TRS, they should seek legal advice ‘as a failure to register may result in financial and criminal penalties’.

Its newsletter said that one objective of the directive was ‘to broaden the scope of trusts required to comply with and sign up to the TRS’ and that this may apply to some GP surgeries ‘depending on how they are structured’.

It said: ‘Property-owning GP partners may be required to register, particularly where the names on the land registry entry do not match the names of the property-owning partners, or where there are more than five surgery owning partners.’

It said that monies held by one practice on behalf of a PCN ‘could be construed as a formation of a trust and may trigger a registration requirement’, depending on the precise wording of the PCN agreement.

The LMC pointed to guidance published by the HMRC on what constitutes an express trust and where exemptions may apply.

And it added: ‘If you are unsure whether you need to register with the TRS, it is important that you receive independent legal advice, as a failure to register may result in financial and criminal penalties.’

In 2019, NHS England said that general practice was responsible for £88m of fraud.

A version of this story was first published on our sister title, Pulse.