2026 AML Amendment Regulations: What accountancy firms need to know
Last updated: July 1, 2026
The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 change several areas that accountancy firms may need to reflect in their anti-money laundering (AML) controls.
The main effect is on how firms word and operate their core AML controls, including customer due diligence (CDD) and enhanced due diligence (EDD), geographic-risk checks, client-account controls, and trust or company-service work.
Importantly, core AML duties remain familiar, from risk assessment and CDD compliance through to monitoring, training, and reporting. The key change is in how some of those duties are described and applied.
Key takeaways
While the AML Amendment Regulations are still in draft form, ICAEW states that implementation is expected to apply from June or July 2026.
The amendments are best understood as a set of targeted changes to the existing Money Laundering Regulations. As such, they do not replace the current AML regime for accountancy practices.
In many cases, the changes are most likely to show up in client-facing documents, onboarding, and escalation guidance. Some changes will only become relevant when the firm offers higher-risk support services, such as company formation, trust-related advice, or client-account activity.
The CDD and EDD changes are mainly a wording and judgement issue for firms. Some euro threshold references will need updating to sterling, while complex-transaction wording should reflect the amended focus on whether a transaction is unusually complex or unusually large in context. This means policies and templates need to help staff apply judgement, rather than simply following old trigger wording.
High-risk jurisdiction wording is also impacted, as mandatory EDD is being reframed around Financial Action Task Force (FATF) call-for-action jurisdictions. That does not remove the need to consider wider geographic risk, including sanctions exposure, corruption risk, and countries with weaker AML controls.
Other changes depend more on the services the firm provides. Practices that hold client money may need clearer client-account wording, while trust-related work might require better prompts at onboarding and review. Firms involved in company-service activity should also check whether procedures cover the sale or transfer of off-the-shelf companies.
Some amendments mainly affect supervisors and other regulated sectors, including banks and cryptoasset businesses. Accountancy firms still need to check whether their services bring any of those changes into their own processes.
CDD and EDD: Wording and judgement need updating
Some CDD threshold references move from euros to sterling. This is mainly a document hygiene issue, but it is still worth dealing with properly.
Older anti-money laundering materials often contain threshold wording that has been copied forward over several years. If those documents still refer to euro amounts, a reviewer may reasonably question whether the firm has kept its AML material up to date.
Therefore, firms should check their core CDD materials, especially the policy, risk assessment form, and staff guidance. This is also a useful point to revisit how often accountants should update CDD during the client relationship.
The review should only focus on the thresholds that the firm actually uses in its services. For example, a small tax and accounts practice does not need to turn this into a full table of every amended threshold across the regulations.
Version control is useful here, insofar as a short note showing that threshold wording was reviewed and updated helps demonstrate that the firm has treated the amendments as part of its normal compliance maintenance.
Unusually complex or unusually large transactions
The amended wording narrows the focus from complexity in general to complexity that is unusual in context. This is an important distinction because many accountancy clients have legitimate reasons for complex transactions.
For instance, a property group or a family business succession plan will involve more documentation than a sole trader’s tax return. The AML concern is stronger when the complexity or size of the transaction is unusual for the client’s known profile and cannot be explained by the service being provided.
That should carry through to the firm’s review prompts, where staff should be asked whether the transaction fits the client’s usual activity, ownership position, and source-of-funds picture.
A long-standing local trading company gives a simple example. If it suddenly introduces a multi-layer overseas structure, receives funds from an unrelated third party, and asks the firm to treat the work as routine, the issue is not technical complexity on its own. The concern is that the instruction no longer fits what the firm knows about the client.
The same logic should also appear in money laundering reporting officer (MLRO) guidance, where staff still need to raise opaque or unusual instructions, even when the automatic trigger is narrower. Firms may also want to compare these prompts with wider CDD trigger events.
High-risk jurisdictions and EDD
The amended approach to high-risk jurisdictions needs careful wording in a firm’s EDD policy. This is because mandatory EDD is being narrowed to countries on the FATF call-for-action list.
That said, the grey list, or increased-monitoring list, is different, as the FATF does not call for automatic EDD for those jurisdictions. It does, however, expect firms and countries to take the information into account in their risk analysis.
Practices should avoid turning this change into a simple low-risk assumption. A client connected to an increased-monitoring jurisdiction may still be higher risk because of its ownership, funding, or sanctions profile.
The client risk assessment should therefore separate automatic triggers from wider geographic risk. For example, EDD may still be needed because of the beneficial owner’s location or an unexplained multi-jurisdictional structure. The same distinction is relevant when separating the firm-wide risk assessment from the client risk assessment.
Moreover, the policy wording needs to help staff make that decision, as judgement calls should feed into ongoing AML monitoring, rather than sitting only in onboarding checks. Wording should also explain that a narrower automatic EDD trigger does not reduce the need to ask geographic risk questions.
Pooled client accounts and client money
The pooled account changes are especially relevant if a practice holds or operates client money. They may also be relevant when the firm’s bank asks for information about a client account.
While small practices rarely hold client money, the risk increases when funds move through the firm’s account in a way that is separate from the professional service being provided. At a minimum, the basic control point requires the firm to identify the money, beneficiary, and link to the engagement.
Crucially, a client account should not become a banking service for clients. If a client asks the firm to receive money from a third party, hold it briefly, and pass it on without a clear link to the engagement, this reflects an AML risk as well as a professional conduct issue.
Information requests and client-facing wording
The amendments point towards clearer records around pooled accounts, which should include:
- Money in and money out
- Who the money is held for
- Why it is held
- Relevant beneficial ownership information
Records need to be strong enough to answer a lawful information request. A bank may ask for information about the identity of persons on whose behalf money is held, while law enforcement or a supervisor may also expect the firm to explain how the account is controlled.
As a result, client-facing wording may need updating. Materials should explain that the firm may ask about the funds, the parties involved, and the purpose of any client-account movement.
The wording should also make clear that the client account can only be used for purposes connected with the professional engagement. A firm may need to refuse or delay a payment if the client cannot explain the source of funds or the commercial reason for using its account.
Because this is both a service and a compliance issue, clear wording at onboarding makes later conversations easier when a client asks the firm to process funds in an unusual way.
Staff controls and escalation
Staff guidance needs to be direct. Firms should consider escalating if there are signs of:
- Unexplained third-party payments
- Funds that do not match the engagement
- Rapid pass-through movement
- Unclear beneficial ownership
- Resistance to source-of-funds questions
The finance or admin team also needs to know when to pause. A payment request should not be processed simply because the client is known to the firm or the partner has approved the wider engagement.
Trust work and Trust Registration Service checks
The trust changes are most relevant when a firm advises on trustees or trust-linked structures, particularly property-holding, non-UK, or family wealth arrangements.
The amendments affect parts of the Trust Registration Service (TRS) rules, which include the following areas:
- Non-UK trusts holding UK land
- Taxable trust triggers
- Access to trust information
- Excluded or low-risk trust categories
The main takeaway is that trust questions should not be left until a registration deadline is obvious. Firms should recognise that trust status can affect CDD, ownership checks, and later tax or monitoring work.
A common small-practice example is a family property arrangement where the client describes the position informally. The firm may be told that a relative holds property “for the family” or that trustees are involved in an overseas structure. This language should prompt the firm to establish whether a trust exists, who controls it, and whether registration or an update check is needed.
Practical takeaway: Trust work can also create file consistency issues, so the firm’s internal and external records should tell the same story.
How accountancy firms should reflect this in CDD
Client acceptance and periodic review forms should include clear trust prompts.
The form should ask the following questions:
- Does a trust exist?
- Does it hold UK land?
- Who are the trustees and beneficial owners?
- Are TRS checks relevant?
The CDD file should also record the firm’s conclusion. If the firm decides that no TRS action is needed, the reason should be clear enough in the event it needs to be explained later.
Periodic reviews are the natural place to pick up developments, where they should catch property, trustee, and control-related changes.
Staff do not need to become trust registration specialists to identify the risk. They simply need to recognise trust-related warning signs and refer them through the firm’s escalation route.
TCSP services: Off-the-shelf companies are the gap to close
Some accountancy firms carry out TCSP work without describing it that way, and relevant activities may include:
- Company formation
- Registered office services
- Company secretarial support
- Nominee arrangements
- Acting, or arranging for someone to act, as a director or trustee
The amendments bring the sale of an off-the-shelf firm within TCSP scope. This closes a gap in which a company could be formed and later sold or transferred without the sale itself being treated in the same way as other company service provider activity.
Accountancy practices can be affected if they form companies and later transfer dormant or pre-formed entities to clients. The compliance risk is that due diligence happens at formation, when there is no real trading purpose, and is missed when the company is later sold to the person who will actually use it.
The sale or transfer point is where the risk becomes clearer. At that stage, the firm can identify the buyer, understand who will control the company, and consider whether the proposed use makes commercial sense.
Service and onboarding points to review
The firm’s service register should identify any TCSP activity. This includes services that sit inside routine company secretarial or business start-up work.
Onboarding workflows require a trigger for the sale or transfer of an off-the-shelf company, and checks should cover the following:
- Buyer
- Beneficial owner
- Purpose
- Expected activity
- Source of funds
- Higher-risk links
The MLRO review points should also be clear. Riskier transfers, for example to an overseas buyer with nominee arrangements or under pressure to complete quickly, may require EDD or escalation.
Staff guidance should also explain why shelf companies create risk. A company with no trading history can still help disguise control or give criminal activity a legitimate-looking vehicle.
Information sharing and Companies House oversight
The amendments strengthen cooperation and disclosure routes involving supervisors, Companies House, and other public bodies. A firm may not see that process directly, but it changes the environment in which its records are assessed.
The main effect is that the information in the firm’s AML file should be consistent with key external records and client communications.
At the same time, inconsistency is not always suspicious, as a Companies House record may be out of date or a client may have changed beneficial ownership during the year. The issue is whether the firm has identified the difference and recorded the explanation.
A clear audit trail is most important when supervisors and public bodies need to connect information. If a reviewer asks why the beneficial owner on the file differs from the person with significant control record, the file should show what was checked, what the client said, and why the firm accepted or challenged the explanation.
What AML materials accountancy firms should review now
The review should be proportionate to the firm’s services and client base. The most useful exercise is to identify which everyday AML materials are affected by the amended wording.
| Area to review | What to check | Why it may need updating |
|---|---|---|
| Firm-wide risk assessment | Check whether the firm-wide risk assessment reflects its actual services, including higher-risk jurisdictions, client money, trust work, TCSP activity, and proliferation financing exposure. | The amended rules may affect how the firm describes and assesses higher-risk work. |
| CDD and EDD templates | Check sterling threshold wording, EDD triggers, high-risk jurisdiction prompts, and unusual transaction wording. | Templates need to help staff apply the amended language without treating every case mechanically. |
| Trust questions | Check whether client acceptance and periodic review forms ask enough about trusts, trustees, control, and Trust Registration Service relevance. | Trust-related changes may affect the questions asked at onboarding and review. |
| TCSP services | Check whether company formation, registered office services, company administration, and off-the-shelf company transfers are reflected correctly. | Some company-service work may need clearer treatment in the firm’s AML scope and procedures. |
| Client account procedures | Check when the client account can be used, who approves payments, and how unusual third-party payments are handled. | Firms that hold client money may need clearer controls when funds move through the firm’s account. |
| Staff guidance and client communications | Check whether staff guidance and client-facing wording explain when further questions may be needed. | Clearer wording helps staff and clients understand why AML checks may continue during the relationship. |
These best practices give firms a focused review route by starting with the materials staff actually use and updating the wording where the amended rules affect real client work.
Core AML duties that remain unchanged
The amendments do not remove the core AML duties that accountancy firms already know.
The MLRO still needs to receive internal reports and decide whether the circumstances require a suspicious activity report. Staff also need to understand tipping-off risk, so concerns are escalated promptly and handled through the right route.
The same proportional approach applies to the firm’s wider AML procedures. A sole practitioner’s documentation may be shorter than a larger practice’s manual, provided it still explains how risks are identified and managed.
The key point is controlled updating. The 2026 amendments do not require a wholesale rewrite for every small practice, yet affected firms should refresh the practical tools that guide client decisions, especially in the main risk areas covered above.
In summary
The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 are best treated as a focused update to existing compliance arrangements. The basic shape of AML compliance remains in place, while several rules become more precise in areas where judgement, service scope, or client risk can be more challenging to assess.
A closer review is more relevant if the firm’s work carries additional AML risk, particularly through overseas links, client money, trust arrangements, or company-service activity. Practices with a simpler domestic client base may only need a narrower update to the materials staff use most often.
Separate from these amendments, accountancy firms should also keep an eye on the planned move to FCA-led AML supervision.
FAQs
In most cases, a full rewrite should not be needed. That said, firms should still review their AML risk assessment and policies where the 2026 amendments affect services they actually provide, including CDD, EDD, client money, trusts, or company-service work.
A firm should look at whether the transaction is unusual for that client and the service being provided. Size or complexity alone may have a reasonable explanation, but extra attention might be needed when the structure, funding, parties involved, or urgency do not fit the firm’s understanding of the client’s normal activity.
Yes. Mandatory EDD is being refocused around FATF call-for-action jurisdictions, although firms should still consider wider geographic risk. A client connected to an increased-monitoring jurisdiction could need closer review when there are concerns about ownership, sanctions exposure, or unexplained cross-border arrangements.
The most relevant changes require firms to have clearer procedures on when the account can be used, what information is needed about the funds, and who benefits from the payment. A client account should only be used where the movement of money is connected to the professional engagement.
Off-the-shelf company work can create TCSP risk if a firm forms a company and later sells or transfers it to a client. The risk is higher at transfer because the firm can identify who will control the company and how it will be used. Accountancy firms offering this type of support should make sure their AML procedures cover that stage.
References and Source Material
- Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (Draft Statutory Instrument)
- Explanatory Memorandum to The Money Laundering and Terrorist Financing (Amendment) Regulations 2026
- Money Laundering Regulations 2017
- CCAB, Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing: Guidance for the Accountancy Sector
- HMRC, Accountancy sector guidance for money laundering supervision
- HMRC, Risks common to accountancy service providers
- HM Treasury, Improving the effectiveness of the Money Laundering Regulations (Consultation response)
- ICAEW (Anti-money laundering update: future of supervision and upcoming changes to the regulations)
- FATF (High-Risk Jurisdictions subject to a Call for Action – 13 February 2026)
- FATF (Jurisdictions under Increased Monitoring – 13 February 2026)
