Zulfi Meerza of Rahman Ravelli outlines the practical considerations regarding payment of the levy.
The Economic Crime Levy (ECL) is an annual charge affecting organisations that are supervised under the Money Laundering Regulations (MLR) and whose UK annual revenue is more than £10.2 million.
HM Treasury has stated that it expects the ECL to raise £100 million per year from around 4,000 regulated entities.
The funds raised will be used to:
- speed up reform of the UK's anti-money laundering supervisory regime
- increase capacity for analysis of suspicious activity reports (SARs)
- create intelligence teams at Companies House and the Insolvency Service
- expand the National Crime Agency's Combatting Kleptocracy Cell
- hire financial crime investigators across regional and national agencies
- invest in data analysis technology for law enforcement agencies
Collection
Those who are obliged to pay the ECL will have to register for it, submit a return every year and pay a fee every year.
The ECL will be collected from companies by one of three collection authorities:
- the Financial Conduct Authority (FCA)
- the Gambling Commission (GC)
- HMRC
HMRC will be responsible for collecting the ECL from qualifying entities who are supervised by one of 22 professional bodies, including the Association of Chartered Certified Accountants (ACCA), the Insolvency Practitioners Association (IPA) and the Chartered Institute of Legal Executives (CILEX).
Each authority will be responsible for collecting the ECL from those businesses it supervises in relation to the prevention of money laundering. Companies will only have to provide information and payment of the ECL to one collection authority, even if they have more than one supervisor under MLR.
Payment
HMRC is expected to publish detailed guidance later this year on how ECL payments should be made. The FCA and GC are also set to publish their own guidance on the ECL. Companies should follow the guidance issued by their collection authority.
The first ECL payments will be due by 30 September this year. The payment deadline for every year will be 30 September.
The payment will cover the period of the previous financial year, with the amount payable determined by reference to a company’s size. Size will be based on a company’s UK revenue from the accounting period ending in that year.
The ECL will be paid as an annual fixed fee, which will be set according to four company size bands:
- Small - annual revenue does not exceed £10.2 million.
- Medium - annual revenue between £10.2 million and £36 million.
- Large - annual revenue between £36 million and £1 billion.
- Very large – annual revenue of more than £1 billion.
The ECL payment for the bands will be:
- Small - no payment
- Medium - £10,000
- Large - £36,000
- Very large - £250,000
The amount to be paid may be reduced proportionately if a company only carries out regulated activities for part of the financial year.
