The Economic Crime (Anti-Money Laundering) Levy: What Businesses Need to Know
The Economic Crime (Anti-Money Laundering) Levy (ECL) is a new annual charge on businesses that are regulated for anti-money laundering (AML) purposes. The levy was introduced by the government in the Finance Act 2022, and it is designed to raise funds to support the fight against economic crime.
The ECL applies to businesses that have a UK revenue of more than £10.2 million per year. The amount of levy that a business pays will depend on its size, with larger businesses paying more. The levy is payable on an annual basis, and it must be paid by 31 January following the end of the financial year.
Businesses that are subject to the ECL must register with HM Revenue and Customs (HMRC) by 30 September following the end of the financial year in which they first became subject to the levy. Businesses that fail to register on time will be liable for a penalty.
The ECL is a new charge, and there is still some uncertainty about how it will be implemented. However, businesses that are subject to the levy should start planning now to ensure that they are prepared to comply with the new requirements.
The ECL will apply to AML regulated businesses 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
What is economic crime?
Economic crime is a broad term that encompasses a wide range of criminal activities, including money laundering, fraud, corruption, and bribery. These crimes can have a significant impact on the economy, costing businesses and governments billions of pounds each year.
What is anti-money laundering (AML)?
AML is a set of regulations designed to prevent criminals from using the financial system to launder money. AML regulations require businesses to identify their customers, verify their identity, and monitor their transactions for suspicious activity.
Why is the ECL being introduced?
The ECL is being introduced to raise funds to support the fight against economic crime. The government estimates that the levy will raise £100 million per year. This money will be used to fund a range of initiatives, including:
Increased investment in law enforcement
Improved intelligence gathering
Enhanced training for businesses on AML compliance
What do businesses need to do to comply with the ECL?
Businesses that are subject to the ECL must register with HMRC and pay the levy. They must also take steps to comply with AML regulations. This includes:
Identifying their customers
Verifying their customers' identities
Monitoring their customers' transactions for suspicious activity
Businesses that fail to comply with the ECL may be subject to a penalty.
The ECL is a new charge, and there is still some uncertainty about how it will be implemented. However, businesses that are subject to the levy should start planning now to ensure that they are prepared to comply with the new requirements.
https://www.gov.uk/government/publications/economic-crime-anti-money-laundering-levy/economic-crime-anti-money-laundering-levy
https://www.fca.org.uk/news/news-stories/fca-collect-treasurys-economic-crime-levy-anti-money-laundering-july
