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The Economic Crime Levy and the FCA

Author: Nicola Sharp  21 March 2023

Nicola Sharp of Rahman Ravelli outlines how the levy will work for companies regulated by the Financial Conduct Authority.

The UK government has introduced an economic crime levy (ECL) to fund the fight against economic crime.  

The levy will be collected for the government by HM Revenue and Customs (HMRC), the Financial Crime Authority (FCA) and the Gambling Commission. 

Application

The levy will apply to anti-money laundering regulated businesses whose UK annual revenue exceeds £10.2 million, including: 

  • Credit institutions.
  • Financial institutions.
  • Auditors, insolvency practitioners, external accountants, and tax advisers.
  • Independent legal professionals.
  • Trust or company service providers.
  • Estate and lettings agents.
  • High value dealers, casinos, auction platforms and art market participants.
  • Crypto asset exchange providers and custodian wallet providers.

Affected entities will have to register for the ECL, submit a return every year and pay a fee every year. The first payments will be due by 30 September 2023.

FCA

The FCA will be responsible for collecting the levy from those firms that are within its regulated population or are registered with it. It has said that those businesses affected by the levy (which is those who were subject to the Money Laundering Regulations between 6 April 2022 and 5 April 2023) will see it appear on invoices from July this year.

To ensure firms are charged the right amount, the FCA has said they must submit their data via new Reg Data Report (FIN074) – using the FCA’s platform for gathering regulatory data from firms - from 1 April onwards. A failure to submit in time may result in a £250 administrative fee.

Those firms registered as an Annex 1 financial institution will receive a letter to report their data. Annex 1 financial institutions are those whose anti-money laundering controls are supervised by the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 because they offer certain services. They include companies involved with lending, financial leasing, provision of payment services, foreign exchange, financial futures and options, exchange and interest-rate instruments, transferable securities, safe custody services, money broking, portfolio management advice, administration of securities and provision of advice on capital and industrial matters.

Nicola Sharp C 09983

Nicola Sharp

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nicola.sharp@rahmanravelli.co.uk
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Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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