Economic crime levy

Who must pay the levy

Firms pay a fixed fee based on entity size as determined by UK revenue.

There are four bands:

• less than £10.2 million – small firm
• between £10.2 million and £36 million – medium firm
• between £36 million and £1 billion – large firm
• more than £1 billion – very large firm

Small firms are exempt and do not have to pay the levy.

The other bands each pay:

• £10,000 – medium firm
• £36,000 – large firm
• £500,000 – very large firm

How to pay the levy

HM Revenue and Customs (HMRC) collects the levy from medium, large and very large law firms and legal businesses in the 'regulated sector' for AML purposes.

If your business is in scope, you must:

1. register for the levy online
2. submit an online return every year by 30 September
3. pay the levy by 30 September every year your UK revenue exceeds the threshold

If you do not pay the levy

If you did not submit and pay your return by 30 September, HMRC will charge interest and you may have to pay penalties.

Access the economic crime levy service on GOV.UK.

How the levy is spent

The levy raises about £100 million each year from around 4,000 AML-regulated entities.

Each year, HM Treasury reports on the collection and spend of levy funding.

Between 2023 and 2026, HM Treasury plans to:

1. invest over £100 million in technology to analyse and share real-time data on threats
2. fund increased resourcing across the AML system
3. invest £60 million to fund specialist teams in the National Crime Agency
4. provide funding for more UK Financial Intelligence Unit officers and financial investigators to analyse suspicious activity reports (SARs)
5. invest £20 million in Companies House and the Insolvency Service
6. provide £1.2 million to speed up reform of the AML supervisory regime

Read the 2023/24 financial year report on GOV.UK.

How the levy could be improved

We are pleased the UK government listened to our warnings and exempted small firms from the levy. However, we remain concerned about its impact on legal services.

Solicitors and firms already play an important role in tackling money laundering and economic crime, allocating substantial resources to comply with AML obligations.

Basing the levy on revenue is an arbitrary measure. It has no link between the amount a business must pay and the extent of risk it brings into the system.

We're also concerned the bands are too wide: the smallest firms within each band pay as much as the largest. We would support a more refined approach.