Paying the Economic Crime Levy: use the HMRC levy reference, not an ordinary tax reference

The Economic Crime Levy applies to certain medium, large and very large entities supervised under the Money Laundering Regulations. The levy is an annual HMRC liability with its own reference and payment process, so regulated businesses should keep it separate from VAT, PAYE and Corporation Tax banking.

The levy applies to in-scope anti-money-laundering regulated entities above the small threshold

HMRC's current Economic Crime Levy guidance divides liable entities into size bands based on UK revenue and the applicable financial year. Small entities are not charged, while medium, large and very large entities pay fixed annual amounts set by legislation.

Check the current band for the relevant financial year rather than reusing last year's amount. HMRC updated 2026 payment guidance to include the bands applying from 1 April 2026.

Use the levy payment reference shown by HMRC

The Economic Crime Levy payment service provides a dedicated reference through the HMRC account or levy correspondence. This reference should be used with the payment so HMRC can allocate the money to the levy rather than another business tax.

Do not substitute the Corporation Tax UTR, VAT number or PAYE Accounts Office reference. Keep the levy reference in the annual compliance file and include it on the bank approval.

Faster Payments, CHAPS, Bacs and Direct Debit can be available

HMRC's payment page says CHAPS and Faster Payments can reach it same or next day, while Bacs normally requires three working days. Online account payment and Direct Debit are also available under the current service.

Check the bank's transaction limit before the due date. Very large regulated groups can face a material levy, and ordinary finance-user limits may be lower than the tax payment.

Direct Debit has a £20 million maximum

HMRC updated the levy payment page in June 2026 to confirm that payments above £20 million cannot be collected by Direct Debit and require another method. Most entities will be far below that value, but the rule illustrates why payment method should be checked rather than assumed.

Where Direct Debit is used, make sure the nominated business account remains open and funded. A levy filing does not itself guarantee successful collection.

Keep the liable legal entity clear within a regulated group

Large financial or professional groups can contain several AML-supervised entities. The levy calculation and registration rules determine which entity or group treatment applies. The banking payment should follow that legal liability rather than whichever company happens to hold central cash.

If treasury pays on behalf of another group company, record the intercompany movement separately so the tax expense and bank cash remain attributable to the correct entity.

Reconcile the annual levy to HMRC and the bank

Keep the size-band calculation, submission, payment reference and bank confirmation together. If the business overpays, HMRC provides a refund process, so the repayment should clear the levy ledger rather than be booked as operating revenue.

Review the band again before the next year because revenue changes can move the entity into a different levy category. The payment calendar should follow the annual liability, not an old standing amount.

Build the levy into the annual compliance budget as soon as the entity's size band can be estimated. Because the charge is fixed by band rather than a percentage of each transaction, crossing a threshold can create a step change in cash cost even where revenue growth is modest.

For regulated groups, nominate one owner for determining which entities are in scope, which supervisor applies and which legal entity must make the payment. Treasury should not infer liability from the group bank account structure. The payment belongs to the entity identified under the levy rules.

After payment, check the HMRC account rather than assuming a successful bank transfer means correct allocation. Specialist levy references are less familiar to finance teams than VAT or PAYE references and therefore deserve an explicit post-payment check.

Keep evidence supporting the revenue figure used to determine the levy band. A business near a threshold should be able to show how UK revenue was calculated and why the chosen category applies. If the band changes after accounts are finalised, update the tax provision and payment forecast before the deadline.

Because the levy is annual, assign a recurring calendar owner even where the entity pays only once a year. Infrequent obligations are easy to lose when staff change. A permanent compliance calendar should show filing, payment, reference and the person responsible for checking HMRC allocation.