With just four months remaining until the implementation of the Economic Crime Levy (ECL), HMRC has released guidance outlining the necessary steps to prepare for the yearly fee.
The ECL is an annual charge that will impact businesses under the supervision of the Money Laundering Regulations (MLR).
The primary objective of this levy is to generate £100 million per year, which will be utilized to support anti-money laundering (AML) efforts and combat economic crime.
Starting from September of this year, companies with a UK revenue exceeding £10.2 million will be obligated to pay the new levy. The fee will range from £10,000 to £250,000 for the largest businesses.
Organizations eligible for the ECL must register for it and submit an annual return, with the initial payments due by September 30, 2023.
The ECL will be charged to entities during the financial year spanning from April 1, 2022, to March 31, 2023, and will be collected by either HMRC, the Financial Conduct Authority (FCA), or the Gambling Commission.
Additionally, HMRC will be responsible for collecting the levy from accountancy firms supervised by the 22 professional body supervisors (PBSs).
The amount of the charge depends on the business revenue and is divided as follows:
Medium-sized businesses (£10.2m-£36m) will be required to pay an annual fee of £10,000.
Large businesses (£36m-£1bn) will be charged £36,000.
The largest businesses (over £1bn) will be required to pay £250,000.
Small businesses earning less than the £10.2m threshold are not liable for the ECL and are not required to register with HMRC.
Failure to submit an ECL return or maintain the necessary records may result in financial penalties, beginning at £250 or 5% of the outstanding amount. However, these penalties may be avoided if a reasonable excuse is established.
HMRC and the Gambling Commission must conduct assessments within four years from the submission of a return or within 20 years from the due date if no return was submitted.
The annual deadline to register and pay the ECL charge is September 30, 2023.
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact email@example.com or your usual A.C.T. contact.