Fears grow that agencies may have to pay new Economic Crimes Levy

Fears are growing that large estate agency groups may have to pay a mandatory levy towards the cost of anti-money laundering regulations and enforcement. 

The government has announced its intention to raise £100m per year from those companies in sectors where AML applies, to fund a series of reforms and enforcement measures.

Propertymark, which has studied the proposal, says that businesses that are regulated for anti-money laundering purposes - such as estate and letting agents - and are also earning over £10.2m in UK revenue will be liable to pay an Economic Crime Levy, if the new proposals are enacted. 

That levy will vary from £5,000 to £250,000 depending on the revenue of the business, with the first payment scheduled for 2023/24.

More details are to be issued in the near future by the government, but Propertymark fears that heavy costs may fall on some agencies.

Daryl McIntosh, policy manager at Propertymark, says: “Money laundering presents an increasingly prevalent risk. The funds generated by the proposed Economic Crime Levy will make an important contribution to tackling it. 

“While we support the UK Government’s intention to target spending on anti-money laundering initiatives, the draft legislation takes no consideration of risk and represents an additional cost for agents that fall within the scope of the Levy. 

“Agents regulated for anti-money laundering purposes already incur significant costs when registering for supervision as well as in carrying out their duties as required by the money laundering regulations. 

“We trust that the fee structure, when confirmed, will acknowledge this, and welcome the exemption provided to smaller firms under the lower revenue threshold.”