Fee policy 2018/2019

August 2018

What are mandatory practising fees?

Our powers to charge fees are mainly contained in the Solicitors Act 1974 and the Administration of Justice Act 1975, as amended by the Legal Services Act 2007. Our powers to set fees for alternative business structures (ABS) are contained in the Legal Services Act 2007.

The majority of our funding comes from annual fees set each year.

We can charge annual fees to individuals (eg practising certificate fee) as well as to firms (recognised bodies and licensed bodies). These are mandatory and must be paid in order for individuals and firms to practise.

The same statutes also require us to provide a Compensation Fund and to seek contributions from individuals and firms to meet the cost of claims and running the Fund.

What do the fees pay for?

The income from mandatory practising fees can only be used for certain purposes.

These are

  • regulatory activities (the total costs of the SRA)
  • non-regulatory activities provided by the Law Society which are Permitted Purposes under the Legal Services Act (eg Law reform activities)
  • levies required to be paid under the Legal Services Act
  • part of the cost of the Legal Services Board (LSB)
  • part of the costs of the Legal Ombudsman
  • full cost of the Solicitors Disciplinary Tribunal (SDT)

All of these costs make up the total funding requirement which needs to be met by regulated individuals and firms, including ABS.

How we spent your fees in 2017/18

Area Percentage
Staff costs 41%
Disciplinary legal fees 10%
Interventions 11%
Other costs, such as office expenses and research programmes 13%
Services we share with the Law Society, for example HR and Finance 15%
Projects, such as Modernising IT 11%

Due to rounding, the figures do not add up to 100%

What are the principles the SRA uses to determine fees?

The SRA adopted a set of eight principles for setting fees in any year in 2010, they are to:

  • be fairer to fee payers
  • be efficient and economical to administer
  • ensure a predictable income to meet the cost of regulation
  • be stable - charges should not vary considerably year on year
  • be as simple as possible - to enable the regulated profession to predict their likely fees
  • be based on data that can be verified
  • ensure that, where possible, the costs of processes that are not of general application should be borne by those making such application, as far as possible, on a cost recovery basis
  • take some account of ability to pay, in particular in relation to small and new businesses, charitable and not-for-profit organisations, and not be a deterrent for new entrants

The current split for determining fees is

  • a 60/40 Firm/Individual split of practising fees
  • a 50/50 Firm/Individual split of compensation fund contributions
  • including a discount for statutory maternity or adoption leave, or a period of leave equivalent to statutory maternity leave on practising certificates and registrations

Practising certificate and registration fees

Practising period start Full fee Discounted fee
November 1 2018 – December 31 2018 £368 £253
January 1 2019 - March 31 2019 £311 £224
April 1 2019 - June 30 2019 £253 £196
July 1 2019 - October 31 2019 £196 £167

The fees above include a £90 contribution to the Compensation Fund

Firm periodic fees

We use the information in the table below to calculate your firm's periodic fee for 2018/19. You can calculate your firm's fees using our fee calculator.

Turnover band Turnover Range (A) Pay %* of Turnover within band (B) Minimum Turnover in band (C) Minimum Fee in Band (D)
A £0 - £19,999 0.72% £0 £100
B £20,000 - £149,999 0.42% £20,000 £244
C £150,000 - £499,999 0.41% £150,000 £790
D £500,000 - £999,999 0.39% £500,000 £2,225
E £1,000,000 - £2,999,999 0.37% £1,000,000 £4,175
F £3,000,000 - £9,999,999 0.25% £3,000,000 £11,575
G £10,000,000 - £29,999,999 0.21% £10,000,000 £29,075
H £30,000,000 - £69,999,999 0.20% £30,000,000 £71,075
I £70,000,000 – £149,999,999 0.18% £70,000,000 £151,075
J £150,000,000 + 0.07% £150,000,000 £295,075

The periodic fee is calculated using this table and the following formula:

Periodic Fee = (Turnover - C) x B + D

*percent is equivalent to divided by 100" (eg 0.72% = 0.0072)

Example

A firm with turnover of £200,000:

(£200,000 - £150,000) x 0.0041 + £790 = £995

Overseas branches

An additional fee of £200 will be payable for each branch office outside England and Wales.

Compensation fund

Every authorised body that has held or received client money during the period 1 November 2017 to 31 October 2018 must make a contribution of £1,680 to the compensation fund along with their periodic fee.

For new firms, the compensation fund fee is payable if the firm intends to hold or receive client money during the 2018/2019 practising year.

Client money is as defined in the SRA Accounts Rules 2011. If you have queries regarding the definition of client money, please speak to our Professional Ethics Guidance team.

New firm fees

View details of the cost of authorisation of a new firm.

What happens now?

The figures on this page represent the proposed budget for 2018/19. They were approved by the LSB on 16 August 2018.

The approval process is:

  • The Law Society Council approved the budget on Wednesday 5 July
  • Our Board approved the way the budget would be collected on Wednesday 18 July
  • The proposals were sent to the Legal Services Board, who approved the fee structure on 16 August 2018
  • You can begin to renew your practising certificates or registrations, and pay your firm’s periodic fee between 1 - 31 October

Feedback

If you have any comments to make to the SRA on the fee-setting process, please contact us.