UK’s fourth National Risk Assessment 2025

Key messages from the National Risk Assessment of Money Laundering and Terrorist Financing, which will affect your firm-wide risk assessment.

On 17 July 2025, Home Office and HM Treasury published the UK’s fourth National Risk Assessment 2025 (NRA 2025).

How this relates to you

Regulation 18 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) requires that a relevant person takes appropriate steps to identify and assess the risk of money laundering and terrorist financing to which their firm may be exposed. ‘Relevant person’ includes AAT Licensed Accountants and Bookkeepers offering self-employed services. 

Such assessment, also referred to as ‘firm-wide risk assessment’, must be documented and kept up to date. AAT can request a copy of it as part of the Practice Assurance Review, or on an ad hoc basis.

Your firm-wide risk assessment must consider a number of factors and sources of information, one of which is the National Risk Assessment of Money Laundering and Terrorist Financing.

Risks for ASPs

Similarly to previous NRAs, the money laundering risk for Accountancy Service Providers (ASPs) remains high and the terrorist financing risk remains low.

Some services provided by accountants are at higher risk than others. Those most at risk are:

• payroll,
• bookkeeping,
• trust and company related services, and
• tax advice. 

The NRA 2025 is also highlighting the following vulnerabilities in the accountancy sector:

• criminals using different firms for each service, which prevents assessing the risk holistically (fragmentation of services)
• non-compliance with the MLR 2017, whether conducted accidentally, negligently or complicitly
  • for example, lack of appreciation and knowledge of money laundering/terrorist financing risks, lack of policies, controls and procedures, poor customer due diligence both at onboarding and on an ongoing basis
• providing services in a supply chain (can help the end user to maintain anonymity)
• clients in the form of firms or individuals with links to higher risk jurisdictions or overseas Politically Exposed Persons (PEPs)
• clients with cash-intensive business  
• being used for the purpose of tax evasion
• profits from Modern Slavery and Human Trafficking Organised Crime Groups are laundered through money mules and front companies, such as hairdressers or grocery stores, often with the help of complicit accountancy professionals
• providing false legitimacy to front company accounts.

Risks for TCSPs

The money laundering risk for Trust and Company Service Providers (TCSPs) continues to be assessed as high. The key change observed is that the terrorist financing risks of TCSPs increased from low to medium.

The NRA 2025 states that terrorist financing risks may be increased when additional vulnerabilities are present. For example:

• TCSPs are failing to appropriately verify customers’ identities
• complex corporate structures linked to difficulties in identifying the ultimate source of funds
• funds are held in or contribute towards trusts
• use of nominee directors/shareholders to hide beneficial ownership
• negligent or complicit behaviours presented by TCSPs
• inadequate due diligence and risk assessments conducted by TCSPs.

More generally, the NRA 2025 makes it clear that there is increasing alignment between money laundering, kleptocracy and sanctions evasion. It also highlights how emerging technologies (such as Artificial Intelligence, digital platforms and cryptoassets) have enabled new methods for criminals to transfer and hide illicit funds.

AAT strongly supports the Government’s determination to tackle money laundering and terrorist financing, so that the UK remains a safe and prosperous place to work and live.

Next steps

Whilst we have summarised key messages from the NRA, the document contains extensive information and intends to equip you with up-to-date assessment of the current and emerging risks so that you can identify, assess, understand and mitigate risks to which your firm may be exposed. We strongly encourage you to review it in full.

Ensure your AML policies, controls and procedures, firm wide-risk assessment and your Client Due Diligence (CDD) measures reflect findings of the NRA 2025. If you have any staff members, ensure they are properly trained. 

If you know, suspect or have reasonable grounds for knowing or suspecting that a person is engaged in money laundering or dealing in criminal property, you must report it via Suspicious Activity Report to the National Crime Agency.

Further guidance and support on risk management and other components of MLR compliance is available on our AML webpage. You can also contact us on +44 (0)20 7367 1347 or via email [email protected].

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