Last updated: 14 Oct 2020 11:34 Posted in: AIA

In its response to HM Treasury’s Economic Crime Levy consultation the Association of International Accountants (AIA) has argued that small businesses falling under anti-money laundering regulation should be granted an automatic exemption to contributing to the government’s proposed levy. 

Economic crime represents a significant and ever-changing threat to the United Kingdom that has a harmful impact on the economy, competitiveness, citizens, and institutions.  

In 2020 the government announced its intention to introduce an economic crime levy and consulted on how it could be proportionate and effective. The consultation notes that the levy is proposed to help realise the public and private sectors’ shared ambition to improve the United Kingdom’s response to economic crime. 

The levy aims to raise approximately £100 million per year from entities regulated for AML purposes and support reforms to the sustainable resourcing of economic crime, as outlined in the 2019 Economic Crime Plan. 

AIA supports measures to fund the prevention and detection of economic crime and highlights the strong and robust approach that a public-private partnership can have in achieving these goals.  

Insofar as the government should be implementing an economic crime levy AIA would argue strongly that a threshold should be implemented which exempts small businesses from any burden of payment and would support that threshold being set at £10.2m revenue in line with the small business regime. AIA does not agree that small businesses who operate below the threshold should be subject to a smaller flat fee. 

In determining the impact of money laundering the government should consider whether the revenue gathered from small firms (who may in the majority of cases be sole practitioners or micro-businesses) can offset the additional administrative burden placed upon these smaller firms.  

In addition, the government should be looking to avoid imposing additional administrative burden on small business and therefore AIA would not advocate small business or firms being mandated to make a nil declaration and instead should not be required to make any additional declaration. 

AIA has worked constructively with HM Treasury to strengthen the UK’s AML regime and will continue to support its members to tackle economic crime. 

AIA Director of Operations, David Potts said: “Whilst AIA supports measures to tackle economic crime, we consider imposing a levy on small and medium sized practices represents a disproportionate funding model and imposes an inefficient administrative burden.” 

Read the full response here.

Whilst AIA supports measures to tackle economic crime, we consider imposing a levy on small and medium sized practices represents a disproportionate funding model and imposes an inefficient administrative burden