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The Economic Crime Levy (ECL) is an annual charge on businesses that are regulated for anti-money laundering purposes, and whose UK revenue is more than 拢10.2 million per year.

Those businesses need to submit a return and pay the levy every year.

If you鈥檙e liable to pay the levy, this factsheet tells you about the penalties we may charge you if you don鈥檛 comply with your obligations. We can charge these penalties under Regulation 20 of The Economic Crime (Anti-Money Laundering) Levy Regulations 2022.

This factsheet is one of a series. For the full list, go to 188体育 and search 鈥楬MRC compliance checks factsheets鈥�.

If you don鈥檛 submit your ECL return on time

You need to submit an ECL return on or before 30 September after the end of each financial year. If you don鈥檛 do this, we can charge you an initial penalty of 拢250.

If you still haven鈥檛 submitted a return within 3 months of the due date, we can charge you a further penalty. That penalty is 5% of the levy you鈥檙e due to pay for the financial year. We鈥檒l use the information we have to make a reasonable estimate of the levy due. We鈥檒l then send you an assessment for that amount and any penalties that are due.

If you don鈥檛 pay the correct amount of levy on time

You must pay the full amount of levy on or before the due date. The due date is 30 September after the end of the financial year the liability arises. If you don鈥檛 pay the full amount on time, we can charge you late payment penalties. These are:

• an initial penalty of 拢250 for not paying by the due date
• an additional 拢250 penalty if you haven鈥檛 paid 30 days after the due date
• a penalty of 5% of the levy, if you still haven鈥檛 paid 3 months after the due date

If you also haven鈥檛 submitted your ECL return, we鈥檒l use the information we have to make a reasonable estimate of the levy due. We鈥檒l do this when we calculate the 5% late payment penalty.

If you amend your ECL return after you鈥檝e submitted it, there may be additional levy due. If there is, we鈥檒l only charge you late payment penalties if you don鈥檛 pay the additional amount immediately. This also applies if we find additional levy due as a result of a compliance check of your ECL return.

Penalties if we find something wrong during a compliance check

If we鈥檙e opening a compliance check into your ECL return, we鈥檒l write to let you know. If we then find something wrong, we can charge you penalties. These can be 鈥榯ax-related鈥� or fixed, depending on what we鈥檝e found.

Tax related penalties

We can charge a 鈥榯ax related鈥� penalty if (any of the following):

• you submit an inaccurate ECL return
• you do not tell us that an assessment we made was too low
• you do not tell us that a repayment we made was too high

We calculate a 鈥榯ax related鈥� penalty as a percentage of an amount. For the ECL, the penalty is 5% of the amount of levy that you didn鈥檛 declare or tell us about. We鈥檒l normally send you an assessment for this amount of levy. In most cases the penalty is 5% of the amount of levy we assess you for.

Fixed penalty

If we find that you haven鈥檛 kept accurate records for ECL purposes, we may charge you a penalty.

This is a fixed penalty and can be up to 拢3,000. The amount we鈥檒l charge depends on what we find about your record keeping, and whether it stopped you from declaring the right amount of ECL.

What to do if you disagree

If we charge you a penalty, we鈥檒l send you a penalty notice. If you disagree, you鈥檒l be able to appeal. The penalty notice will tell you how.

You鈥檒l also be able to appeal against any assessment we send you.

For more information about your appeal rights, go to 188体育 and search 鈥楬MRC1鈥� or 鈥榙isagree with a tax decision鈥�.

If you have a reasonable excuse

We won鈥檛 charge you a penalty if you have a reasonable excuse for not meeting an ECL obligation.

A reasonable excuse is something that stopped you from meeting the tax obligation on time, which you took reasonable care to meet. It might be due to circumstances outside your control or a combination of events. Once the reasonable excuse has ended, you must put things right without any unnecessary delay.

Whether you have a reasonable excuse depends upon the circumstances that stopped you from meeting the obligation. And also your particular situation and abilities. This may mean that what is a reasonable excuse for one person may not be a reasonable excuse for someone else. If you think you have a reasonable excuse, please tell us. If we accept that you have a reasonable excuse, we will not charge you a penalty.

If there was anything about your health or personal circumstances that contributes to you not meeting your tax obligations, please tell the officer you鈥檙e dealing with. Telling them will mean that they can take this into account when considering whether you had a reasonable excuse.

More information

Our privacy notice

Our privacy notice sets out the standards that you can expect from us when we ask for information or hold information about you. To read this, go to 188体育 and search 鈥楬MRC Privacy Notice鈥�.

If you are not happy with our service

Please tell the person or office you鈥檝e been dealing with. They鈥檒l try to put things right. If you are still not happy, they鈥檒l tell you how to make a formal complaint.