Overview

How to prepare for the Levy

There are three collection authorities which may look to collect the ECL, these are:

• HMRC.
• The Financial Conduct Authority (FCA).
• The Gambling Commission (GC).

Entities whose revenue exceeds £10.2m that are regulated by HMRC, including those regulated by certain professional bodies for anti-money laundering purposes (full list on separate tab) will need to:

• Register with HMRC.
• Submit annual returns to HMRC
• Pay an annual fee to HMRC.

Entities regulated by the FCA and GC will need to follow their procedures which are beyond the scope of this note. Businesses supervised by both HMRC and another professional body should register, file and pay with the other body, not HMRC.

Who must register

Entities who need to consider registration are legal persons including:

• Individuals.
• Companies.
• Limited Liability Partnerships (LLPs).
• The responsible partners in a partnership.

Each entity that is part of a corporate group will need a separate registration. Only those entities meeting the requirements need register.

Partnerships must register at the partnership level.

Tax agents cannot register their clients for the ECL. Registration must be completed by the entity itself.

Registration is only required if:

• UK income is in excess of £10.2m in the accounting period ending in the prior financial year to 31 March.
• The business is already regulated by HMRC or a professional bosy for anti-money laundering purposes.

Registration is a one-off occurrence but filing (see below) is annual.

The income amounts can be adjusted on a daily apportionment where regulated activities are carried out for only part of the year or the accounting period ending in the financial year is short.

New businesses that do not have an accounting period ending in the financial year need to use the accounting period that ends within three months of the end of the financial year.

It is expected that businesses in the following sectors will need to register:

• Credit institutions.
• Financial institutions.
• Auditors, insolvency practitioners, external accountants and tax advisers.
• Independent legal professionals.
• Trust or company service providers.
• Estate agents and letting agents.
• High value dealers, casinos, auction platforms and art market participants.
• Cryptoasset exchange providers and custodian wallet providers.

Registration is via the Government Gateway.

When registering the business will need to provide:

• Information about UK revenue for the last financial year
• The date when the organisation started anti-money laundering-regulated activities, if in the past financial year.
• The business sector operated in.
• Information about the accounting period length .

The following information will also be required about a designated person in the business (for contact purposes):

• Name.
• Role.
• Email address.
• Telephone number.

Additional information about the business willl also be required, depending on what type of entity is registering, for example, Unique Tax References (UTRs), registration numbers, National Insurance numbers etc.

Once registered, an ECL number will be provided and it will be needed for the annual return.

Note that if you are registering more than one entity, you will need to create a separate Government Gateway User ID and password for each one.

Amendments to the registration can be completed from the ECL account, once created.

Submitting a return

Registration is requied before a return can be submitted. Returns need to be submitted online by 30 September following the end of the financial year for which the return is due (1 April to 31 March).

Payment also needs to be made by 30 September.

Returns need to report:

• The length of the relevant accounting period.
• The UK revenue for that accounting period.
• Whether regulated activity started or stopped in the prior financial year and the length of time the activities continued.
• Which band the entity is in and the ECL due.

The person completing the form also needs to provide the following information:

• Name
• Role (in the organisation)
• Contact details

Anyone registered for the ECL must file a return, even if the income threshold has not been met in the relevant year and no payment is required.

Filing is online and the Government Gateway user ID used to register will be required.

Once a return has been submitted, a 14 digit number will be issued, starting with an X. This number will be needed in order to pay the ECL.

Returns can be amended after submission via the ECL account.

The bands

The amount of the ECL depends on the UK revenue in the accounting period that ends in the prior financial year.

The levy may be apportioned if regulated activities are only undertaken for part of the financial year.

Paying the Levy

The ECL must be paid by 30 September each year. Where this falls on a weekend, payment should reach HMRC by the end of the previous working day. 

Penalties and interest may be charged for late payment. 

Payment should not be made until the relevant ECL return has been submitted. In order to make payment, the entity's 14-character ECL return number, starting with an X, will be needed. This can be found: 

• In the entity's HMRC online account. 
• On the ECL return submission confirmation email from HMRC.

Payment may be made by bank transfer, via direct debit (set up through an HMRC online account) or by using a credit or debit card. There is also a 'pay by bank account' option that is usually an instantaneous transfer and links to the taxpayer's online banking account. See below for HMRC bank account details:

Account details to use if your account is in the UK

• sort code — 20 05 17
• account number — 40204374
• account name — HMRC General BT Receipts

Account details to use if your account is overseas

• account number (IBAN) — GB86 BARC 2005 1740 2043 74
• bank identifier code (BIC) — BARCGB22
• account name — HMRC General BT Receipts

It is possible to request a refund of the ECL, online, where either too much is paid in error or the ECL return has been amended, reducing the amount payable. 

List of professional bodies

HMRC are responsible for collecting the ECL from those qualifying entities that are supervised by one of the following:

• Association of Accounting Technicians (AAT)
• General Council of the Bar of Northern Ireland
• Association of Chartered Certified Accountants (ACCA)
• Insolvency Practitioners Association (IPA)
• Association of International Accountants (AIA)
• Institute of Certified Bookkeepers
• Association of Taxation Technicians (ATT)
• Institute of Chartered Accountants in England and Wales (ICAEW)
• Chartered Institute of Legal Executives (CILEx)
• Institute of Chartered Accountants in Ireland (ICAI)
• Chartered Institute of Management Accountants (CIMA)
• Institute of Chartered Accountants of Scotland (ICAS)
• Chartered Institute of Taxation (CIOT)
• Institute of Financial Accountants (IFA)
• Council for Licensed Conveyancers (CLC)
• International Association of Bookkeepers (IAB)
• Faculty of Advocates
• Law Society
• Faculty Office of the Archbishop of Canterbury
• Law Society of Northern Ireland
• General Council of the Bar
• Law Society of Scotland

Small print & links

HMRC guidance: Register for the Economic Crime Levy