As explained in our previous article about the Economic Crime Levy, this new levy comes into force from 1 April 2022. It covers England, Wales, Scotland and Northern Ireland. As a reminder, this levy applies for each financial year (starting on 1 April and running to 31 March) but the turnover on which the charge is based is measured using the business’ period of account ending within the financial year.
The regulations governing the making of returns and the payment of the levy have now been issued in The Economic Crime (Anti-Money Laundering) Levy Regulations 2022.
Collecting Authorities
The three collection authorities are the Financial Conduct Authority (FCA), the Gambling Commission (GC) and HM Revenue & Customs (HMRC). The appropriate authority for a particular business is determined as follows:
- in the case of a person for whom the Financial Conduct Authority is a supervisory authority, the Financial Conduct Authority;
- in the case of a person for whom the Gambling Commission is a supervisory authority, the Gambling Commission;
- in any other case, HMRC.
In the event that more than one of the collection authorities could apply for a particular business, there are provisions that determine which takes precedence.
Notification, returns and payments
The rules on notification, returns and payment are slightly different for each authority:
Procedures where the FCA is the appropriate collection authority
- The FCA will issue a notice to the person to make a return relating to their UK revenue for a particular financial year.
- The notice will specify a filing date – “the FCA return date”.
- The return must contain a declaration by the relevant person that it is correct and complete, to the best of their knowledge.
- If there is a payment due, the FCA will write to the affected business and the payment must be made within 30 days of that written payment notice.
- Interest for late payment is charged at 5% above the Bank of England base rate at the time.
- The return can be amended within 12 months of the filing date.
Procedures where the GC is the appropriate collection authority
- If a business is liable to pay the levy, it must notify the GC of its liability, make a return and pay the levy on or before 30th September after the end of the financial year for which the liability arises.
- The GC will, in due course, make public what the business is required to provide when notifying the GC of its liability and what must be included in the return.
- The return will contain a declaration by the relevant person that it is correct and complete, to the best of their knowledge.
- Late payment interest will be charged at the same rate as for late payment of most other taxes. These can be found here.
- The Gambling Commission may make public a list of businesses required to pay the levy.
Procedures where HMRC is the appropriate collection authority
- If a business is liable to pay the levy, it must notify HMRC of its liability, make a return and pay the levy on or before 30th September after the end of the financial year for which the liability arises.
- HMRC will, in due course, make public what the business is required to provide when notifying HMRC of its liability and what must be included in the return.
- The return will contain a declaration by the relevant person that it is correct and complete, to the best of their knowledge.
- The return can be amended within 12 months of the filing date.
- The regulations do not make mention of late interest on amounts due to HMRC but this would be expected to be charged at the same rate as for late payment of most other taxes which can be found here.
Other points to note
If the relevant person who operates the business has died, has become bankrupt or is subject to a winding up, receivership or administration then the person acting for them is required to notify, file the return and make any payment of the levy.
For partnerships, the return is in the name of the partnership, not the individual partners.
The format of and method of filing for the return has not yet been released.
What actions are necessary now?
If you believe your business may need to pay the levy please make contact with PEM so we can ensure that we update you when further details of the process for assessment and collection are released.
