June 2025 AAT Disciplinary, Professional Standards and Regulation update

Minor amendments to AAT’s Standards and Regulations members should be aware of.

We have made a number of minor changes to some of our standards and regulations with the approval from the Professional Standards and Regulation Board (PRSC).

• AAT Regulations 2025 (PDF)
• Client Care policy (PDF)
• Professional Indemnity Insurance policy (PDF)
• Clients’ Money policy (PDF)
• Continuity of Practice policy (PDF)

The changes address areas where stakeholder feedback suggested clarity was required, and in some cases, the amendments reinforce positions we had already clarified through our guidance. The amendments focus on changes which remove or amend impractical requirements, while still protecting the public.

A summary of the changes can be found below. This is an opportunity for all licensed members, however new or longstanding, to read each document in full and familiarise themselves with our compliance requirements.

Common disciplinary cases resulting in sanctions and monetary fines include non-compliance relating to inadequate PII insurance, clients’ money contraventions, and failing to issue correct terms of engagement to clients. Please ensure you or your firm avoid similar mistakes. 

Further details can be found on our Disciplinary Outcomes page.

In summary

AAT Regulations 2025

The amendments made to the AAT Regulations 2025 do not constitute significant revisions but will aid consistency with the revised Articles of Association, governance changes, and clarity to support existing regulatory requirements and terminology used.

Changes include:

Removal of the ‘Eligibility for student membership’ section and any relevant references of the term ‘student’ used across these regulations.

Reintroduction of work experience back in as an option to the eligibility requirements for Affiliate status (Regulation 7(a)) and Full membership (Regulation 9(b)).  

Change of section name from ‘Insolvency, Criminal convictions and disciplinary sanctions’ to ‘Disciplinary powers’ and update to the section ‘Annual declaration’ to ‘Annual renewal’ to ensure consistency with terminology used in the Renewal policy and how we communicate with our members.

Inclusion of specific clause to set out the importance of updating the Association with material changes to their AML registration application details in addition to membership to ensure both the member, and AAT, as the authority, are meeting legal obligations to hold correct information for all relevant persons within the meaning of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRO2017).

Client Care policy

The specific rule requiring licensed members to do a critical evaluation prior to taking on a new client has been removed. Although taking reasonable measures to determine whether there are any reasons why you should not take on a client is still important, we wanted to streamline the rules by removing this duplication because it is already a required part of the client due diligence and risk assessment compliance requirements under Regulations 27 and 28 of the Anti-Money Laundering regulations.

We have amended the policy to require that the client be given the name and contact information of the professional indemnity insurer as well as the insurance’s territorial coverage upon request. This guarantees conformity with the current Provision of Services Regulations and is in line with our guidelines and how we handle complaints of this kind.

Taking account of governance change in Clients’ Money policy

AAT’s Clients’ Money policy sets out AAT’s approach to licensed members holding Clients’ Money which relates to accountancy and/or bookkeeping services the member has been engaged to perform for the client. Clients’ money means money of any currency (whether in the form of cash, cheque, draft or electronic transfer) which a firm holds or receives for or from a client.  

No material changes have been made to the requirements, but we have tidied up the policy by removing the reference to the ‘Council’, replacing it with the ‘Professional Regulation, Standards and Compliance board’ (PRSC) to ensure consistency with the recent AAT governance changes.

Suitable alternate in Continuity of practice policy

We have modified the policy criteria to include the fact that if a licensed member is a principal in an accounting firm with several qualified directors or partners who hold active licenses with the AAT or other professional bodies, it is acceptable to designate the other principals to serve as the continuity in the licensed member’s absence. Although these alternate arrangements are already widely accepted, we frequently receive this question via our assurance helplines and practise assurance review activity.

Professional Indemnity Insurance (PII) policy

We have improved the policy wording for licensed members to reflect our original policy intention that that the licensed member must hold valid professional indemnity insurance that satisfies the requirements of AAT’s PII policy for all the period during which a practising licence is held. There should be no gaps in coverage at any time, which we are identifying frequently during our reviews.

While our policy has a general requirement for run-off cover if you are a sole practitioner or the only principal in a firm that has ceased trading, it doesn’t adequately provide any specific requirement in circumstances where a member has retired or resigned as a principal in an entity (potentially becoming an unregulated firm) that will continue to trade. We have included how we expect our members to comply in such circumstances.

Useful links

Please make use of the following resources to ensure you are up to date with the latest regulatory information.

AAT Standards and Requirements

Support for licensed members

AAT’s AML hub

AAT’s ethics hub

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