News
Prepare for the Economic Crime Levy (ECL) with HMRC’s Latest Guidance
14 Aug 2023
Countdown to Change
In just over a month, the Economic Crime Levy (ECL) will come into effect, marking a significant step in the fight against economic crime. HMRC is committed to ensuring you’re well-prepared for this new levy, and they’ve taken the initiative to provide comprehensive guidance to help you navigate it seamlessly.
Understanding the ECL
The ECL is directed towards businesses falling under the umbrella of the Money Laundering Regulations (MLR). Its primary goal is to generate £100 million annually, contributing to the ongoing efforts against economic crime and reinforcing anti-money laundering (AML) strategies.
Who’s Affected?
Starting this September, companies with a UK revenue exceeding £10.2 million will be subject to the ECL. The fee ranges from a reasonable £10,000 for smaller businesses to a more substantial £250,000 for larger enterprises. Remembering eligibility depends on your financial year, spanning from April 1, 2022, to March 31, 2023.
Navigating the Process
For eligible businesses, the process involves registering for the ECL and submitting an annual return. The initial payments are due by September 30, 2023. The levy collection will be overseen by HMRC, the Financial Conduct Authority (FCA), or the Gambling Commission, ensuring efficient execution.
Accountancy Sector Considerations
Businesses in the accountancy sector can breathe easily as HMRC collects the levy from firms supervised by the 22 professional body supervisors (PBSs).
Breaking Down the Charges
Your business revenue bracket determines the specific charge you’ll face:
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Medium-sized businesses (£10.2m-£36m): An annual fee of £10,000 applies.
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Large companies (£36m-£1bn): The fee is £36,000.
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The largest enterprises (over £1bn): Brace yourself for a £250,000 charge.
Exemptions for Small Businesses
If your business falls below the £10.2 million revenue threshold, you can breathe a sigh of relief. The ECL doesn’t apply to you, and there’s no need to register with HMRC.
Compliance is Key
To ensure a smooth process, timely submission of your ECL return and proper record-keeping are essential. Failure to meet these requirements could result in penalties starting at £250 or 5% of the outstanding amount. However, reasonable excuses can exempt you from these penalties.
Timeline for Assessment
Timeframes for assessing your situation bind HMRC and the Gambling Commission. You must complete assessments within four years of your return submission or within 20 years from the due date if you fail to submit a return.
Mark Your Calendar
September 30, 2023, is the annual ECL registration and payment deadline. As the deadline approaches, HMRC will continue to provide guidance, covering essential topics such as registration procedures, submitting ECL returns, and making payments.
We’re Here to Help
Rest assured; we’re here to support you throughout this journey. Please don’t hesitate to contact us if you have questions or require further assistance regarding the ECL. Our aim is to ensure a seamless transition for your business as we navigate these changes together.
Get in Touch
We love meeting new, exciting businesses. Get in touch with our team to see how we could enhance and protect your financial position.
Or if you’d prefer to speak to someone directly just give us a call on: 08000 664 664 or email: hello@wrpartners.co.uk.
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