Simon Harbord

With all that is going on at the moment, its quite likely that you are not aware that the Government has introduced the Economic Crime (Anti-Money Laundering) Levy. This previously mooted levy, by way of the Finance Act 2022, achieved Royal Assent on 24^th February.

What is the Economic Crime (Anti-Money Laundering) Levy?

The Government has stated:

‘The Economic Crime (Anti-Money Laundering) Levy (‘the levy’) is part of the government’s wider objective, outlined in the 2019 Economic Crime Plan (ECP), to develop a long-term Sustainable Resourcing Model (SRM) to tackle economic crime’

The levy aims to raise £100 million a year from the AML regulated community to help fund new and improved AML capabilities. The NCA for example has been struggling to cope with all the reports it receives. Extra funding aims to address such problems.The first levy year is almost upon us, as it will run from April 2022 to March 2023, with relevant levy payments first being collected in April 2023 (i.e., payment in arrears). It will not be collected by all AML supervisors with only the Financial Conduct Authority, HMRC and the Gambling Commission being tasked with these duties. For the legal sector (and Accountants too) the HMRC will collect it. When you next plan your budgets, don’t forget to take into account the fact that as of April 2023, you may well be paying this levy in addition to all of your other overheads:

• the levy is to be charged on a fixed fee system, based upon your UK revenue
• it will be paid by medium, large, and very large AML-regulated entities
• small entities (those with UK revenue below £10.2 million) will fortunately be exempt.

An entity is classified as:

• medium if its UK revenue for the relevant accounting period is more than £10.2 million but not more than £36 million
• large if its UK revenue for the relevant accounting period is more than £36 million but not more than £1 billion
• very large if its UK revenue for the relevant accounting period is more than £1 billion.

The levy is to be charged as follows:

• medium entities will pay £10,000
• large entities £36,000
• very large entities £250,000.

In addition to the levy itself, the Government estimates that it will impact an estimated 4,000 businesses, who will need to self-declare their levy status (i.e., whether they are AML regulated, and their UK revenue during the period of accounts that ended in a said financial year) to their relevant collector or be invoiced by their collector. The relevant collector (HMRC, the FCA or the Gambling Commission) for businesses will be the collector that already regulates/supervises them under AML Regulations, so the majority of firms will have an existing relationship with their collecting body.

The exception is c.450 firms who are regulated/supervised by the Professional Body Supervisors (PBSs), who will need to declare their status and make their levy payment to HMRC.

The government is to issue centralised guidance on gov.uk that sets out the process for paying the levy in due course.

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