New research has uncovered the financial impact of the economic crime levy (ECL) on lettings agents.

Introduced in April 2022, the ECL applies to firms in regulated sectors with annual UK revenue exceeding £10.2m and includes large lettings agencies.

The levy is structured in tiers based on revenue, with businesses in the highest bracket seeing their levy payments double from £250,000 to £500,000 as of 1 April. Firms must settle their ECL payments for the 2023/24 financial year by 30 September, adding to the mounting financial pressures in the sector.

A Freedom of Information request submitted by Credas to HM Revenue & Customs has provided detailed insights into the levy’s revenue since its implementation

The data indicates that in the 2022/23 fiscal year, the ECL generated £15m, with estate agents and letting professionals contributing £3.8m. In 2023/24, the total revenue slightly decreased to £14.6m, with the real estate sector’s contribution marginally lower at £3.7m. The independent legal and professional sector accounted for £6m in 2022/23 and saw a slight increase to £6.1m in 2023/24.​

Credas said these figures highlight the substantial financial obligations imposed on the real estate industry, which are further compounded by the costs associated with HMRC registration and compliance with anti-money laundering regulations.

Tim Barnett, chief executive of Credas Technologies, said: “The Economic Crime Levy was introduced with the intent of bolstering efforts against financial crimes.

“However, our analysis reveals that it has placed a significant financial strain on the real estate sector, which is already grappling with substantial compliance costs. It’s imperative that these financial obligations do not stifle the very industries they aim to regulate.”