ECSH46050 – Policing the perimeter – operational guidance
This guidance should be read in conjunction with the technical
policing the perimeter (PTP) guidance at ECSH46025 and
PTP standard work instructions (SWIs) in the knowledge library.
Referral mechanisms
PTP is contacted via their mailbox when there is a suspicion
that a business is trading in relevant activity whilst unregistered. Referrals
can come from within EC-S, HMRC or externally. PTP will review all incoming
emails and consider each one.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
PTP also review the list of businesses which have failed to
complete their annual declaration via their government gateway and make contact
with them to ensure the business re-registers if registration is still
required.
Stages of PTP work
When conducting PTP work, a caseworker will consider (and
apply if necessary) the following stages: determining relevant activity,
contact and sanctions.
Stage 1 – determining relevant activity
Cases are assessed using a range of HMRC and
open-source systems to establish a profile for the business.
The aim is to establish if a business is conducting
relevant activity and meets the criteria for registration. This includes
establishing the correct legal entity and gathering evidence to establish the
trading status.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
For further information on how to determine whether a
business is conducting relevant activity, see the PTP
risk SWI in the EC-S Knowledge library.
Stage 2 – Contact
Initial contact
The next step is to open a case on Caseflow, using the
project ID. See the PTP compliance
SWI on how to do this. Once this is done, the business is contacted by
letter.
This letter sets out what the business must do, including
warning it that it is committing a criminal offence if it is conducting
relevant activity without registration. The letter states that if the business is
trading whilst unregistered, it must cease trading until it has made the
appropriate registration. For approval
sectors trading can commence once an application has been submitted for
registration. For fit
and proper sectors, relevant activity must not be conducted until the
application has been approved. Whilst this letter invites the business to apply
for registration, it also explains that it is not guaranteed that the
registration will be approved. The business has the opportunity to provide
reasons as to why it feels it should not be registered (if appropriate) or provide
the details of a professional body or other supervisor that is registered with. The letter also explains that if the business
has been trading whilst unregistered it may be liable to a penalty for that
period. The maximum penalty chargeable is £104,000.
Further contact
If no response is received within 14 days of issuing the
letter, a telephone call will be made to the business to ensure it has been received
and discuss the contents. If no response is received to the letter or phone
call, a reminder letter is then sent after 30 days from the date the initial
letter was issued, with a follow up telephone call made if there is no response
to the reminder letter.
Where a business does not apply for
registration following PTP intervention
Where the business does not make an application for
registration or fails to respond to the letter and/or phone calls, the case
should move to stage 3 and be considered for a sanction for trading whilst
unregistered.
Where a business applies for registration
following PTP intervention
Where a business applies to register for supervision with EC-S,
their application is then considered by the authorisations
team. Making an application to register does not guarantee that a business
will be accepted onto the register. If the application is incomplete, it will
be rejected and the business notified of the action it is required to
take.
If the authorisations team determine there are grounds to
refuse the application, a notice will be issued to the business explaining why
and any action it can take.
If the authorisations team determine that the application
can be approved, the business will be notified.
Whether the business’s application for registration is
approved or not, and the business has been trading whilst unregistered, a
sanction will be still be considered and dealt with by the authorisations team.
For further information on stage 2, please see the PTP
compliance SWI in the EC-S Knowledge library.
Stage
3 – Sanctions
Where businesses have been trading whilst unregistered, EC-S will
consider an appropriate sanction.
The PTP team utilise the following two options:
Financial
penalty
Criminal Prosecution
If there is evidence that the business has, or is, trading
whilst unregistered as an accountancy service provider (ASP), the team may also
consider suspending any active agent codes identified.
To do
so, PTP emails the Agent Maintainer team gateway with the findings and request
that they suspend the agent codes, which will restrict the ASP’s ability to
conduct activity on behalf of their clients.
If we
impose a financial penalty for trading whilst unregistered following our intervention/enquiry,
this will be considered as ‘prompted’, as the business did not make an
application to be registered of its own accord. As such, the business will not
receive a 50% penalty reduction as per the penalty
framework.
If a business
has been issued with a penalty, it is still required to register if it is conducting
relevant activity. If it fails to register following receipt of a penalty, PTP
may consider referral for criminal prosecution and/or further sanctions.
EC-S treat most trading
whilst unregistered breaches as a civil matter, however we may consider a
breach as a criminal matter depending on the circumstances.
We also support money
laundering prosecutions brought by other law enforcement agency partners by conducting
PTP interventions on businesses that are identified as trading whilst
unregistered.
For further information on how to action a Type 2 penalty,
see the guidance in
the EC-S Knowledge Library.
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