In order to fund government action in relation to combatting money laundering, the government has introduced the ‘Economic Crime Levy’ (‘ECL’), an annual fixed fee to be paid by entities who are supervised under the Money Laundering Regulations[1] (‘MLR’) and whose UK revenue is equal to or exceeds £10.2m. In the gambling industry, this means any entity that holds a casino operating licence or remote casino (games host) operating licence from the Gambling Commission.

Casino-licensed entities supervised by the Gambling Commission will be required to register online with the Gambling Commission, submit returns and pay any levy due by 30 September following the end of the financial year. The first payments will be due by 30 September 2023 in respect of the financial year 1 April 2022 to 31 March 2023.

The ECL is reported and paid on an entity-by-entity basis. Where an entity is part of a group of companies, each group member must be independently assessed and if it meets the requirements must register, submit yearly returns and, where due, pay the ECL separately.

The amount of the ECL payable is determined by the ‘UK revenue’ of an entity in the financial year in question:

UK revenue is calculated for the relevant accounting period that ends within each financial year. ‘Revenue’ is defined as turnover plus any other amounts not included within turnover which are recognised as revenue under GAAP in the profit and loss account.

For a UK resident, UK revenue is calculated as total revenue less any revenue which, on a just and reasonable apportionment, is attributable to the activities of any non-UK permanent establishment.

For a non-UK resident person, UK revenue is revenue which, on a just and reasonable apportionment, is attributable to activities of any permanent establishment of the person in the UK. In addition, specific rules apply to non-UK resident casinos (regulated by the Gambling Commission), whose UK revenue will include those activities that fall within the scope of remote gaming duty, in addition to any other income attributable to any UK permanent establishment they may have in the UK.[2]

ECL payments are not deductible in calculating profits for corporation tax or income tax purposes. Penalties apply for various failures including failure to submit a return and failure to pay the ECL[3]

Gambling Commission guidance[4] confirms that returns should be submitted on a yearly basis, even if an entity does not meet the relevant thresholds for paying the ECL in that year. We understand that a return is required to be made even where non-UK resident gambling entities are supervised under the MLR but have no UK revenue.

Whilst tax advisors are not able to register clients for the ECL, we can provide support to help you calculate your UK revenue so you can determine your liability under the ECL.

Please get in touch if you would like to discuss this with us.

References

[1] Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692)

[2] S.57, Finance Act 2022

[3] Economic Crime (Anti-Money Laundering) Levy Regulations 2022 (SI 2022/269)

[4] https://www.gamblingcommission.gov.uk/guidance/the-economic-crime-levy/submitting-an-annual-return