23rd July 2020

HM Treasury (HMT) has published a consultation on a new economic crime levy designed to help fund government action to tackle money laundering in the UK and help deliver reforms committed to in the 2019 Economic Crime Plan.  The government is looking to raise an additional £100 million through the application of the new mandatory levy raised from firms in the anti-money laundering (AML) regulated sector, which comprises around 90,000 entities.

Insurance intermediaries and ancillary insurance intermediaries are only caught by this levy where they arrange contracts of long-term insurance.

The consultation seeks views about the design of the levy, what it will pay for, how it should be calculated and distributed across the AML-regulated sector, and how the levy should be collected.  The levy would go towards funding reform of the Suspicious Transactions Reporting programme, an uplift in the UK’s Financial Intelligence Unit and costs at the National Economic Crime Centre, the National Assessments Centre (NAC) and the National Data Exploitation Centre (NDEC).

The consultation also includes a call for evidence on current levels of private sector investment on counter fraud measures, as well as gauging private sector views on contributions towards funding the fraud response.

Members may access the consultation paper by clicking here.

It is proposed that the new levy would become payable in the financial year 2022/23.  However, this timeline is subject to the findings of this policy consultation and the time needed to develop the necessary collection infrastructure and go through the legislative process.

The consultation closes on 13th October 2020.  A response template can be found by clicking here. These responses should be sent by email to: [email protected]

BIBA members’ compliance and regulation queries should be directed to: [email protected].

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