The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023
IPA Insolvency Practitioner newsletter, May 2023
Contents
- Paul Smith, CEO
- Samantha Keen, President
- New SARs Glossary Code & Reporting Routes Guidance
- SARs in Action
- 2023 Roadshow Series kicks off in Cardiff on Tuesday! (CPD: 3h)
- Hot on the heels of Cardiff, the Roadshow comes to Manchester (CPD: 4h)
- Bookings are open for the 15th Personal Insolvency Conference (CPD: 6h)
- IPA examinations update
- Discounted meeting facilities from Office Space in Town (member login required to view)
- Save money on your airport parking with APH! (Member login required to view)
- Need new IT products? Claim exclusive IPA membership offers from Dell
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- Make savings on essential CPD with exclusive discounts on training from the IPA and our partners
- Call out to all Registered Property Receivers
- IPA exclusive industry update from Insolvency Insider
The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023 are of good news for IPs. They amend the Economic Crime (Anti-Money) Laundering Regulations 2022, which in their initial iteration seemed to make IPs responsible and liable personally for the payment of the new economic crime levy from relevant insolvency businesses, even if the levy was incurred pre-appointment.
As a reminder, the levy applies to businesses with at least UK revenue of £10.2M. There is a sliding scale of payments up to £250,000 for businesses with UK revevue of over £1bn. The business must also carry out AML regulated activities. The levy would therefore apply to solicitors, accountants, estate agents, art dealers, casinos etc., and the levy for 2022/23 is due on 30 September 2023.
The issue with the 2022 Regulations was in Regulation 15 which advises of what happens if the trader dies or becomes insolvent and states at Reg 15(2)(b) that the person [liable to pay the levy] ‘acts as the liquidator, receiver or administrator in relation to the business of the person liable to pay the levy or acts in an equivalent capacity, may be treated by the appropriate collection authority as the person liable to pay the levy and must satisfy the requirements of Part 3 of the Act and the requirements of these Regulations as if they were the person liable to pay the levy.’
What the 2023 Amendment Regulations have done is added in paragraphs 3 & 4 to Reg 15 which state:
(3) Any amount of levy which relates to UK revenue attributable to a period before the date when the winding-up, receivership, administration or other equivalent procedure takes effect is payable by the person subject to the winding-up, receivership, administration or an equivalent procedure, and not by the person treated as the person liable to pay the levy under paragraph (2).
(4) Any amount of levy which relates to UK revenue attributable to a period on or after the date when the winding-up, receivership, administration or other equivalent procedure takes effect is to be regarded as an expense of that winding-up, receivership, administration or equivalent procedure.”.
What the position is now is that any levy amount for pre-appoinment revenue = an unsecured claim as it remains payable by the insolvent business and any levy amount for post-appointment revenue = an expense of the estate and the IP is no longer potentially personally liable.
Please also remember that if you are trading on and dealing with the insolvency of a regulated business that you must contact their regulatory body to advise of your appointment as per para F4.1 of the Insolvency Appendix to the CCAB AML Guidance. As compliance advisors have been pointing out, the change does not remove the requirement to confirm your appointment to the relevant supervisory body, nor does it remove the requirement to submit returns to the relevant body (liable to HMRC but could include the Gambling Commission and other bodies) for pre-appointment periods and potentially post-appointment periods.
Finally – members are reminded of the article in the April 2023 AML Digest on the levy which included a link to HMRC guidance on the levy and their role as a collection authority.