The government has published draft legislation introducing an Economic Crime (anti-money laundering) Levy (‘the Levy’) on entities that are regulated for anti-money laundering (AML). This is intended to fund the fight against economic crime.
The following has been set out and outlined in the Finance Bill 2021-2022:
- AML regulated entities will be required to pay the Levy if they are categorised as medium, large, or very large based on the amount of UK revenue they make
| Size of entity | Levy |
| Small (under £10.2m UK revenue) | Exempt |
| Medium (£10.2m – £36m) | £10,000 |
| Large (£36m – £1bn) | £36,000 |
| Very large (over £1bn) | £250,000 |
- the first Levy will be charged during the financial year from 1 April 2022 to 31 March 2023 with payment due as a fixed fee the following year
- the Levy will be collected by HMRC, the Financial Conduct Authority (FCA) and the Gambling Commission
Entities which are likely to be affected (estimated to be around 4000 businesses) include the following:
- credit institutions
- financial institutions
- auditors, insolvency practitioners, external accountants and tax advisers
- independent legal professionals
- trust or company service providers
- estate agents and letting agents
- high value dealers, casinos, auction platforms and art market participants
- crypto asset exchange providers and custodian wallet providers
The government believes that as this sector is the most exposed to money laundering risk, it should be the principal contributor to the reform initiatives and predicts collection of around £100m a year with a review of the Levy by the end of 2027. The introduction of the Levy is expected in 2023-2024.
To read the full policy paper please click here and for the Finance Bill 2021-2022 please click here.
For more information and assistance, please contact Robert Drysdale, Elizabeth Sam or a member of our Wealth Planning team.
