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FEES 13.2 The IML levy

Obligation to pay the IML levy

FEES 13.2.1RRP

2A firm must pay each IML levy applicable to it:

  1. (1)

    in full and without deduction by 1 August (or, if later, within 30 days of the date of the invoice) in the financial year to which the sum relates3; and

  2. (2)

    in accordance with the rules in this chapter3.

FEES 13.2.1AG

6Schedule 6A to the Act sets out a procedure to enable the FCA to cancel or vary the Part 4A permission of a person who it appears to the FCA is not carrying on a regulated activity. Paragraph 5 of that schedule sets out a procedure for annulment of cancellation or variation of Part 4A permission in specified circumstances. Where the FCA grants an application for annulment, paragraph 6 of Schedule 6A sets out its effect. In particular, the cancellation or variation of Part 4A permission is treated as if it had never taken place. As a result of the effect of annulment under Schedule 6A, the IML levy in relation to the period during which the person’s Part 4A permission was cancelled or varied applies to the person.

FEES 13.2.1BR

6Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and the person falls within FEES 13.2.1R and the annulment takes effect after 1 August or after the invoice referred to in FEES 13.2.1R(1) has been issued, then that date for payment does not apply, but the person must pay the IML levy applicable to it in full and without deduction, on the date on which the annulment takes effect.

FEES 13.2.2RRP

[deleted]3

Calculation of the IML levy

FEES 13.2.3RRP

The IML levy is calculated as follows:

  1. (1)

    identify whether activity group CC1 or CC2 applies to the business of the firm for the relevant period (for this purpose, the activity groups are defined in accordance with Part 1 of FEES 4 Annex 1AR);

  2. (2)

    for each of those activity groups, calculate the amount payable in the way set out in FEES 13.2.4R;

  3. (3)

    add the amounts calculated under (2);

  4. (4)

    work out whether a minimum fee is payable under Part 2 of FEES 7 Annex 1R and if so how much;

  5. (5)

    add together the amounts calculated under (3) and (4);

  6. (6)

    modify the result as indicated by the tables in FEES 4.2.7ER5 (Modifications for persons becoming subject to periodic fees during the course of a fee year),5 FEES 4.2.7FR (Calculating the fee in the firm’s first year of authorisation), FEES 4.2.7GR (Calculating fees in the second fee-year where the firm received permission between 1 January and 31 March in its first fee-year) and FEES 4.2.7HR to FEES 4.2.7KR (Calculating all other fees in the second and subsequent years of authorisation where a full year of tariff data is not available)5 (if applicable);

  7. (7)

    apply any applicable payment charge specified in FEES 4.2.4R (Method of payment) to the amount in (6), provided that:

    1. (a)

      for payment by direct debit, successful collection of the amount due is made at the first attempt by the FCA; or

    2. (b)

      for payment by credit transfer, the amount due is received by the FCA on or before the due date; and

  8. (8)

    make the calculation using information obtained in accordance with FEES 4.4 (Information on which fees are calculated).

FEES 13.2.4RRP

The amount payable by a firm with respect to a particular activity group is calculated as follows:

  1. (1)

    for a firm in activity group CC1, a £5 flat rate is the amount payable by the firm with respect to that activity group;

  2. (2)

    for a firm in activity group CC2:

    1. (a)

      up to and including £250,000 consumer credit income: £10 is the amount payable by the firm with respect to that activity group; and

    2. (b)

      over £250,000 consumer credit income: £10 + £0.2021 per £ thousand or part £ thousand of consumer credit income; and

  3. (3)

    a firm in activity group CC2 must calculate its tariff base using the annual income calculation in Part 3 of FEES 4 Annex1AR and FEES 4 Annex 11BR and the valuation date requirements in Part 5 of FEES 4 Annex 1AR.

FEES 13.2.5RRP

For the purposes of FEES 13.2.4R:

  1. (1)

    a firm in activity group CC2 may apply the relevant tariff bases and rates to its non-UK business, as well as to its UK business, if:

    1. (a)

      it has reasonable grounds for believing that the costs of identifying the firm’s UK business separately from its non-UK business in the way described in FEES 4 Annex 11BR are disproportionate to the difference in fees payable; and

    2. (b)

      it notifies the FCA in writing at the same time as it provides the information concerned under FEES 4.4 (Information on which fees are calculated), or if earlier, at the time it pays the fees concerned; and

  2. (2)

    for a firm which has not complied with FEES 4.4.2R (Information on which fees are calculated) for this period, the IML levy is calculated using (where relevant) the valuation or valuations of business applicable to the previous period multiplied by the factor of 1.10.

FEES 13.2.6RRP

[deleted]4

FEES 4 rules incorporated into FEES 13 by cross-reference

FEES 13.2.7GRP

The Handbook provisions relating to the IML levy are meant to follow closely the provisions relating to the payment of the periodic fees in FEES 4.3.1R. In the interests of brevity, not all of these provisions are set out again in FEES 13. In some cases, certain FEES 4 rules are applied to the payment of the IML levy by individual rules in FEES 13. The rest are set out in the table in FEES 13.2.9R.

FEES 13.2.8RRP

The rules set out in the table in FEES 13.2.9R and any other rules in FEES 4 included in FEES 13 by cross-reference apply to the IML levy in the same way as they apply to periodic fees payable under FEES 4.3.1R.

FEES 13.2.9RRP

Table of rules in FEES 4 that also apply to FEES 13 to the extent that in FEES 4 they apply to fees payable to the FCA.

FEES 4 rules incorporated into FEES 13

Description

5

5

4

4

FEES 4.2.10R

Extension of time

FEES 4.2.11R (first entry only)

Due date and changes in permission for periodic fees

FEES 4.3.7R

Group of firms

FEES 4.3.13R

Firms applying to cancel or vary permission before start of period

FEES 4.3.17R

Firms acquiring businesses from other firms

FEES 4.4.1R to 6FEES 4.4.6AR

Information on which fees are calculated

FEES 13.2.10GRP

In some cases, a FEES 4 rule incorporated into FEES 13 in the manner set out in FEES 13.2.7G will refer to another rule in FEES 4 that has not been individually incorporated into FEES 13. Such a reference should be read as being to the corresponding provision in FEES 13.