AMPs: Economic Crime Levy

AMPs: Economic Crime Levy
Written by Rena Neville, Head of FCS Compliance – Art Division

Many Art Market Participants (AMPs) have received notices from HMRC about the Economic Crime Levy, which was introduced as part of the Finance Act 2022. This is a levy on certain AMPs (those subject to the UK Money Laundering Regulations). Specifically, those AMPs with UK revenue of over £10.2m are obliged to pay the Economic Crime Levy, which is used to help the Government fund its AML supervision of the Art Market.

The levy will first be charged during the year running from 1 April 2022 to 31 March 2023, meaning that the payments should be made during the year running from 1 April 2023 to 31 March 2024. The levy is calculated based on revenue, which includes not only sales of tangible goods, but service fees.

Not everyone needs to pay. In particular, regulated AMPs with UK revenue of less than £10.2 million are exempt. Those with UK revenue between £10.2 and £36m have a fixed fee ranging from £5,000-£15,000; and those entities with revenue equal to or more than £36m have fees as set out below:

AMPs are required to declare to HMRC on an annual basis whether the ECL applies to them and the band under which they fall.  UK revenue in this context means:

• for a UK resident entity, all revenue less the revenue as, on a just and reasonable apportionment, is attributable to the entity’s activities in a territory outside the UK; and
• for a non-UK resident entity, the portion of the entity’s revenue that, on a just and reasonable apportionment, is attributable to the entity’s activities in the UK.

The levy will first be charged during the year running from 1 April 2022 to 31 March 2023, meaning that the first set of payments will be made during the year running from 1 April 2023 to 31 March 2024.

_{Published: July 2023}