Economic crime 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 from the levy. The other bands each pay:
- £10,000 – medium firm
- £36,000 – large firm
- £250,000 – very large firm
How it's collected
HM Revenue and Customs (HMRC) collects the levy from in-scope legal entities.
Payments for the financial year 1 April 2022 to 31 March 2023 were due by 30 September 2023.
What you need to do
If your business is liable for the levy, you must:
- register for the levy
- submit an online return every year
- pay the levy by 30 September every year your UK revenue exceeds the threshold
You will be sent an access code to complete the registration process.
To register, you will need:
- information about your UK revenue for the last financial year
- the date your business started AML-regulated activities
- the name, role, email address and telephone number of someone in your business
- the sector your business operates in
You will be sent your levy registration number once your registration is complete.
How it's spent
HM Treasury states that the levy will raise £100 million per year from around 4,000 AML-regulated entities.
The funds raised by the levy will be used to:
- accelerate reform of the UK's AML supervisory regime
- increase capacity for analysis of suspicious activity reports (SARs)
- create intelligence teams at Companies House and the Insolvency Service
- hire financial crime investigators across national and regional agencies
- expand the National Crime Agency's combatting kleptocracy cell
- invest in data analysis technology for law enforcement agencies
Although we're pleased the government has listened to our warnings and exempted small firms from the levy, 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 with 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 be more supportive of a more refined approach.
- September 2023 – the first payments were collected by HMRC, the Financial Conduct Authority and the Gambling Commission
- July 2023 – registration opened for the HMRC online service
- April 2023 – the first levy year began
- March 2022 – the government laid the secondary legislation that sets out the framework for key levy processes – including notification, payment and returns
- February 2022 – the levy was introduced by the Finance Act 2022, which gained royal assent on 24 February
- October 2021 – we emphasised that the views of the legal sector must be given greater weight in the design of financial crime policies, procedures and systems
- September 2021 – we analysed the government's response and spoke to affected members to gather views on the draft legislation
- February 2021 – past president David Greene explained the representations we've been making to government on behalf of members
- October 2020 – we strongly opposed the imposition of the levy and warned that a levy based on revenue would harm the profession
- July 2020 – we sought feedback from members about the impact on you and your businesses
The HMRC online service is now open for levy registrations, submissions and payments.
The payment for the financial year from 1 April 2022 to 31 March 2023 was due on 30 September 2023.
If you did not submit and pay your return by 30 September, HMRC will charge interest and you may have to pay penalties.
Contact HMRC's helpline on 0300 322 9621 if you have any issues with registration.