As part of its March 2020 Budget, the government announced a new levy (the “ECL”) on entities within the AML regulated sector to raise £100 million per year in order to fund reforms outlined in the government’s 2019 Economic Crime Plan to combat economic crime in the UK. The levy will apply to AML regulated entities with over £10.2 million in UK revenue.

The exact amount that AML regulated entities will be required to pay will be specified in the 2021-22 Finance Bill. However, the government has indicated that the fees can be expected to range as follows:

• Small firms – exempt
• Medium firms – £5,000 – £15,000
• Large firms – £30,000 – £50,000
• Very large firms – £150,000 – £250,000

In respect of the gambling sector, fees will be collected by the Gambling Commission with the first payments anticipated to be made in 2023/24.

Following the launch of a consultation in July 2020 (the “Consultation”), which invited views on the design principles of the ECL, including how the ECL should be collected, calculated and distributed across the AML regulated sector, the government has published a summary of the responses to the Consultation, its response to those points and its proposed next steps (available here).

A short technical consultation (the “Technical Consultation”) on the contents of the Economic Crime (Anti-Money Laundering) Levy draft legislation will now run until 15 October 2021 ahead of its inclusion in the 2021-22 Finance Bill. The legislation will, amongst other matters, establish the circumstances for the levy to be charged in a levy year, define what is classified as a “medium”, “large” or “very large” firm as determined by that entity’s UK revenue and define how an entity’s UK revenue will be determined.

As part of the Technical Consultation, the government has encouraged the industry to provide feedback on the contents of the draft legislation including for views on how UK revenue should be defined.

Responses to the Technical Consultation can be sent to eclevyconsultation@hmtreasury.gov.uk.