Solicitors Regulation Authority Limited Financial Statements for the year ended 31 October 2025

The directors present their strategic report on the group for the year ended 31 October 2025.

Introduction to the Solicitors Regulation Authority

The Solicitors Regulation Authority (SRA) is the largest regulator of legal services in England and Wales, covering around 90% of the regulated market. We regulate more than 200,000 solicitors and around 9,000 law firms. Our mission is to drive confidence and trust in legal services.

Today, two-thirds of the public say they have that confidence.

Our focus is on the issues that will help further build that trust, improving legal services for the public by:

• Setting high standards for individuals and firms who want to enter the profession. We make sure anyone wishing to qualify as a solicitor is assessed to the same high standard through the Solicitors Qualifying Examination (SQE). Law firms and other legal businesses who want to be regulated must pass our rigorous checks before they can operate.
• Preventing harm and protecting consumers when things go wrong. We are developing our approach to regulation, to provide early warning of potential problems. When a firm collapses, we will move quickly to protect client money and any files relating to their case. Where dishonesty within a legal services provider means a client loses money, the SRA Compensation Fund can provide redress. And, where those we regulate fall short of the standards we and the public expect, we will hold those responsible to account, closing businesses or referring individual solicitors to an independent tribunal where needed.
• Supporting the use of new technology and innovation. We are working to create an open and competitive legal market, providing modern, accessible and affordable services.

You can read more about our work in our Corporate Strategy 2023–2026.

The Solicitors Regulation Authority Limited was incorporated on 18 May 2020. On 1 June 2021 we began operating, carrying out a number of functions previously undertaken by the Solicitors Regulation Authority (SRA) as part of the Law Society (TLS), a Royal Charter Company (RC000304). The year ended 31 October 2025 is our fourth full year of operating.

The SRA is a public benefit entity.

Business review

2024/25 was the second year of our 2023–2026 corporate strategy, which focuses on four objectives:

• we will deliver high professional standards
• we will strengthen our risk-based and proactive approach
• we will support innovation and technology
• we will be an authoritative and inclusive organisation, meeting the needs of the public, consumers, those we regulate and our staff.

Below we set out some of our key achievements in delivering these four strategic priorities.

Objective one: we will deliver high professional standards

Protecting the public

• The vast majority of solicitors work to high standards. However, if solicitors fall short of what is expected, we step in to keep the public safe. We brought 104 cases to the Solicitors Disciplinary Tribunal (SDT) in 2024/25. The number of cases we bring to the SDT varies year on year, but not significantly. Over the last five years, it has ranged from 76 to 104 per year. We also intervened into and closed down 42 law firms in 2024/25 where we felt there was a significant and immediate risk to clients and the public. This compares to 59 interventions in the 2023/24 year. Although there has been a reduction in interventions this year, in recent years we have seen a general increase in the number of interventions we are carrying out, particularly more large-scale interventions.
• We can help members of the public and small businesses, in certain circumstances, where their money has been lost or gone missing - for instance, due to a dishonest solicitor. In 2024/25, we paid out £47.4m from the SRA Compensation Fund, compared to £27.9m paid out in 2023/24. The compensation fund is a non-consolidated fund. It is maintained and administered by the SRA under requirements set out in statute. Recent years have seen a general increase in the amount paid out from the Compensation Fund, driven by an increase in the number of large-scale interventions.
• When a firm closes down unexpectedly, we can also step in to protect consumers by returning clients' files and money to them. In 2024/25, we secured 86,674 boxes of client files which equates to around 1.2 million individual files for consumers. We also make sure all firms we regulate have professional indemnity insurance in place, to protect clients from the risk of financial losses due to any negligence.

SSB, Pure Legal and high-volume consumer claims

• In 2024/25, we continued our investigations into law firms SSB and Pure Legal. Former clients of the firms have been unexpectedly asked to pay adverse legal costs in relation to their discontinued cavity wall insulation claims. We recognise the continued significant distress for clients impacted in these cases, which has raised serious questions about the conduct of some solicitors and law firms. Concerning SSB, we have now completed our investigation, having reviewed all the relevant evidence, and are deciding on next steps. In 2024, to protect the public, we took action against four solicitors who practised at SSB and were involved in this matter by placing conditions on the way they can work. These conditions were imposed on an interim basis, pending the final outcome of our investigation. We have completed a review of relevant client files concerning Pure Legal and are soon to complete our investigation following review of recently provided additional information.
• In recent years, we have had to step in and close down a number of firms specialising in high-volume consumer claims work, to protect the public. And the collapse of SSB has resulted in significant detriment to many of its clients. This case showed that the risks to consumers in this high-volume claims market were shifting, and that we needed to continue to improve how we spot and assess risk and use data, and act on threats before consumers suffer.
• SSB prompted a wholesale review of how the high-volume consumer claims market is working. We are concerned that a significant number of those operating in the sector - both law firms and claims management companies - are not consistently fulfilling their obligations to always act in clients' best interests or to follow the relevant rules and regulations. This behaviour is not only leading to individual consumers facing harm but also risks undermining public trust in the legal profession. As of 31 October 2025, we had 76 open investigations relating to 61 firms. In the period from April 2024 to September 2025, we closed down six firms carrying out this type of work.
• In 2025, we published a thematic review of firms handling various types of consumer claims, including financial product claims (such as mis-sold car finance), diesel emissions, data breaches, flight delays and housing disrepair. We found a range of problems, from failures to give clients clear and thorough information about costs, funding and available options, to providing inadequate advice about a claim's merits and prospects of success. Following this review, we opened investigations into nine of the 25 firms we visited.
• To identify and tackle poor practice, we also wrote to more than 700 firms in 2025 working on high-volume consumer claims, sharing the concerns from our thematic review. We required these firms to complete a mandatory declaration confirming they comply with all relevant rules and obligations. Where we uncover poor practice, we will take robust action against those firms responsible. Read more information on high-volume consumer claims.
• In addition to taking action to protect the public by making sure firms meet their obligations, in September 2025 we published a discussion paper to explore ways to address five key challenges in this high-volume consumer claims market. These insights will inform future changes in how we regulate, so we improve how this area of the market works for consumers.
• More information on how we have engaged with the public on the issue of 'no win no fee' agreements within the high-volume consumer claims area of the market can be found under objective four.
• In October 2025, the Legal Services Board (LSB) published a report about our handling of SSB. We accepted the recommendations of this review, and we have apologised for not acting more quickly. We are committed to doing all we can to learn from this event and to improve how we work. The case showed that we need to continue changing the way we spot and assess risk and use data so that we can proactively identify new and emerging risks and threats, so we can better protect consumers. We have already made significant changes to the way we work since 2024. We will now build on this, addressing any additional areas for improvement.

Consumer Protection Review

• The scale of the Axiom Ince intervention we carried out in October 2023 and money lost (more than £60m), alongside a general rise in the number of larger firm failures, has raised questions about the issue of consumer protection, how we can make sure client money is better protected, and the role of the compensation fund - which is funded by the contributions of solicitors and law firms. To address these questions, in early 2024 we launched our Consumer Protection Review.
• After extensive stakeholder engagement, we consulted in November 2024 on potential changes, with a focus on how we can better protect client money in legal services. We sought views on potential changes to how and when law firms handle client money, and how this money is protected. You can read more about our engagement work in this area under objective four.
• We published our response to the LSB's report about the events leading up to our intervention into Axiom Ince in October 2024. Following this report, the LSB published directions setting out changes we should make. We have already made progress towards meeting these directions - in particular through two large pieces of work: our Consumer Protection Review (mentioned above) and Risk and Data Programme (see more under objective two).

Investigating abuses of the litigation process

• Investigating suspected misconduct relating to abusive litigation, including bringing or threatening claims for an improper purpose or which otherwise constitute an abuse of the court process, has become a growing area of our work. This has arisen due to the public controversy over the competing rights of free speech and defamation law. In recent years, we have published a thematic review concerning conduct in handling disputes, and a specific thematic review and warning notice on a type of abusive litigation known as strategic lawsuits against public participation (SLAPPs).
• Since 2022, we have received approximately 300 reports about abusive litigation, only some of these specifically raising allegations of SLAPPs. Of those complaints we have proceeded to formal investigation in 97 cases of suspected SLAPP activity or conduct falling within the scope of our warning notice. Of the 97 investigations, two thirds have been resolved and 31 cases remain open. Of those matters that have come before the SDT, there have been two high profile matters determined against the SRA (one reversed on appeal to the High Court and one determined by the SDT in favour of the respondent which is subject to appeal).
• The former, commenced in late 2024, concerned a solicitor seeking to prevent publication of correspondence. The SDT upheld one of the two counts and found the second not proved. The solicitor received a £50,000 fine and an order to pay the SRA's costs. His appeal to the High Court was determined subsequent to the financial year. The outcome of the appeal reversed the SDT decision, finding that the solicitor did not act improperly, his fine was therefore revoked and the SRA was ordered to pay his costs of the proceedings from inception. In the second case, which was also determined subsequent to the financial year, the SDT held in favour of the respondent and summarily dismissed the proceedings, ordering the SRA to pay the respondent's costs. That decision is subject to an appeal which has yet to be heard.

Post Office Horizon IT scandal

• The Post Office Horizon IT scandal is one of the biggest miscarriages of justice in British legal history. We have more than 20 live investigations into solicitors and firms who worked on behalf of the Post Office/Royal Mail Group. We are looking at a range of issues, including solicitors' management and supervision of cases, duties relating to expert witnesses, as well as others. Now that the public inquiry has finished hearing evidence, we are liaising closely with it to collect all relevant evidence, and with the police to understand what, if any, action they might take. We are progressing our investigations and will take action as soon as possible, but in many cases we will need to wait until the inquiry has delivered its final report and factual findings. If we were to move to enforcement action ahead of the inquiry's final report, we would risk not only undermining the inquiry process, but also our own cases. It could open us to significant challenge and put at risk a fair and successful outcome. This would not be in the public interest. In addition to this, in some cases, we will need to wait to take enforcement action, so we don't prejudice any pending criminal prosecutions.
• Neither the fact that we await the inquiry's final report, or potential criminal investigations, has prevented us from progressing our investigations into solicitor misconduct. Our approach has been to work through each investigation to advance them to the point of being able to start enforcement action, where appropriate.

Fining powers

• Following consultation and changes in legislation, our fining powers for traditional firms increased and we exercised our powers to issue fixed financial penalties (FFPs) for the second year. We issue FFPs for certain specified breaches of our rules, for example, non-compliance with our Transparency Rules or failing to respond to our requests.
• In 2024/25, we invoiced a total of 169 fines and also issued 30 FFPs.
• The total value of all fines issued - including FFPs - was £6.4m. A large proportion of this was due to us issuing our largest ever fine - £4m - to the former non-solicitor owner of Kingly Solicitors. We shut down the firm in 2020 following serious concerns about the misuse of client funds.
• All fines are payable to HM Treasury and do not represent income for the SRA. Aside from the £4m fine, there has been an increase in the value of fines invoiced year-on-year, which is linked to an increase in anti-money laundering (AML) enforcement action and fines issued as a result (see more below under 'Anti-money laundering and financial crime regulations').

First-tier complaints

• To improve consumer outcomes, in both service delivery and access to redress, we carried out a programme of work on first-tier complaints. Our aim is to drive systematic cultural change in the way solicitors and firms take account of complaints. In May 2025, we consulted on changes to help law firms further improve how they define and deal with complaints about their service. Implementation of changes in this area will require LSB approval in 2025/26.

In-house solicitors

• More than 34,000 solicitors work in-house - around one-in-five. The majority of in-house solicitors will want to do the right thing and work to high professional standards. However, recent high-profile cases, such as the Post Office Horizon IT scandal, have highlighted the risks that arise when a client's interests are not properly balanced with the public interest and the role of the in-house lawyer. In 2024, we engaged with solicitors working in-house through surveys, roundtables, direct discussions and more than 50 formal responses to draft documents on new guidance tailored for them. It covered topics such as identifying your client, internal investigations, reporting concerns and legal professional privilege, as well as guidance for employers to help them understand a solicitor's professional obligations.
• Since launching the guidance in November 2024, it has been viewed more than 10,000 times. We also hosted a series of events (both online and in-person) for the in-house community in 2025, attracting almost 1,700 participants. These sessions covered issues such as the role of the employer in supporting in-house teams, workplace culture and ethical behaviour.

The Solicitors Qualifying Examination

• The 2024/25 year was the fourth year of running the SQE, the single rigorous assessment for all aspiring solicitors. The SQE ensures that anyone wishing to qualify as a solicitor in England and Wales has been assessed to the same high standard. The assessment consists of two parts: SQE1, which tests functioning legal knowledge, and SQE2, which tests practical legal skills. It is delivered on our behalf by our supplier Kaplan. Five examination sittings took place in 2024 across test centres in the UK and around the world.
• Of the 9,751 individuals admitted in 2024/25, 38% came through the SQE route (3,665 individuals). This proportion has increased since 2023/24, when of the 9,602 individuals admitted, 27% came through the SQE route (2,596 individuals).
• The majority of individuals still qualify through the Legal Practice Course (LPC) route. However, in the coming years, fewer people will be eligible to take this route as it is phased out, and most people will have to take the SQE to qualify. We have already started to see these numbers decline year-on-year. In 2024/25, 60% qualified through the LPC route (5,818 individuals), down from 68% in 2023/24 (6,504 individuals). A small proportion of individuals qualify through other routes.
• The SQE has an Independent Reviewer, whose role is to provide external assurance that the SQE assessments and outcomes are fair, defensible and will command public confidence. In their latest report, covering January to October 2024, they concluded the delivery of the assessment was good, noting improvements on previous years, and that the outcomes delivered were fair and defensible.
• The Independent Reviewer reflected on an error that occurred when the January 2024 SQE1 results were converted to scaled scores. As a result of this error,175 candidates were told they had failed an assessment when they had, in fact, passed. The Independent Reviewer reported that the issue was dealt with in as an efficient way as possible. We apologised for the error. Kaplan reimbursed costs incurred by candidates as a result of the error and made a goodwill payment to all affected candidates. Kaplan commissioned an external review into the causes of the error and made a number of changes to its ways of working in response to lessons learned.
• The Independent Reviewer also praised the collaborative approach between us and Kaplan, highlighting a shared commitment to openness, accountability and public confidence.
• To support access to legal services in England and Wales, a single legal jurisdiction comprising two nations and two official languages, we have offered the entirety of the SQE in Welsh since January 2025.

Continuing competence

• We monitored how solicitors and firms are meeting their regulatory obligations in relation to continuing competence. We do this through a range of methods, including thematic reviews, targeted sampling of training records, inspections focused on anti-money laundering compliance, and a declaration when solicitors renew their practising certificate. We placed restrictions on solicitors if they did not confirm their competence to us.
• We also further developed our resources to help solicitors maintain their competence and published our third annual assessment of continuing competence to drive positive learning and development behaviours in the profession. It showed that most solicitors completed learning and development focused on maintaining their technical legal knowledge. It also found the firms we regulate have robust systems and controls in place to maintain solicitors' competence and deliver good-quality legal services.
• However, there are areas for improvement. For instance, some solicitors are not fully reflecting on their obligations or keeping up to date with our guidance and warning notices. We are seeking to address this issue - for instance, through increased, targeted communications. We also identified criminal and civil law as areas where we received a notable increase in reports of misconduct. In the coming year, we will explore how solicitors and firms approach maintaining competence by reviewing a sample of training records. We will also consider what further work we can do to make sure that solicitors maintain their competence and plan to issue a consultation on our proposed approach.

Anti-money laundering and financial crime regulations

• We want to make sure the legal sector is at the forefront of tackling money laundering and financial crime. Over recent years, we have increased the resources in our AML team and carried out more proactive reviews and inspections. In 2024/25, we took regulatory action in 151 cases. For comparison, in 2023/24, we took regulatory action in 78 cases. The most common areas where we took action were where firms failed to carry out risk assessments on their clients and/or their clients' matters, failed to have a compliant firm-wide risk assessment in place and failed to have adequate AML policies, controls and procedures in place.
• We issued 73 fines totalling around £950,000 in 2024/25 compared to 44 fines totalling around £600,000 in 2023/24. The increase in the value of fines between 2023/24 and 2024/25 is due to an increase in the number of fines, as well as an increase in our fining powers. The SDT imposed 13 fines with a combined total of almost £550,000, compared to two fines with a combined total of more than £500,000 in 2023/24.
• Please note, our AML work is reported to a different financial year, to meet the requirements of the AML oversight regulator, the Office for Professional Body Anti-Money Laundering Supervision. This means the 2024/25 figures relate to 6 April 2024 to 5 April 2025 and 2023/24 figures relate to 6 April 2023 to 5 April 2024. All fines are paid to HM Treasury.
• In October 2025, the government announced that the Financial Conduct Authority (FCA) will become the single professional services supervisor for AML and counter-terrorism financing. We have made significant progress in recent years, increasing and improving our approach to AML supervision. We will work closely with the FCA, government and all other stakeholders to make sure there is a smooth transition to the new arrangements. In the meantime, we will continue our work to make sure solicitors and law firms are doing all that is needed to keep the proceeds of crime out of our society.
• Under objective two, we set out how we have increased our proactive work to tackle the risks of money laundering.

Chartered Institute of Legal Executives

• In summer 2024, our Board agreed it would be willing to regulate Chartered Institute of Legal Executive (CILEX) members after being approached by CILEX in 2022. We await a decision from CILEX as to whether it wants to proceed.

Objective two: we will strengthen our risk-based and proactive approach

Data, analysis and insights informing proactive regulation

• We are developing a more agile, data-driven and risk-based approach to regulation through our Risk and Data Programme. This will shift our supervision of the sector from largely responding to reports about solicitors and problems to proactively identifying and acting on emerging and increasing risks before they lead to public harm. For instance, we have taken steps to proactively respond to the risks in the high-volume consumer claims market, such as through targeted firm visits and our declaration exercise, as set out above under objective one.
• To support our new approach, we are significantly increasing our investment in data, intelligence and risk-scanning capabilities and bolstering our enforcement resources.
• We have started to undertake short-term improvements to expand our use of data analysis, and in 2024/25 developed an AML model that uses machine learning to predict the money laundering risk of a firm. More information on our proactive approach to regulating money laundering can be found below.
• We carried out thematic reviews in areas where we are seeing risks, such as:
  • high-volume consumer claims
  • first-tier complaints handling
  • professional obligations and probate and estate administration.
• As part of our thematic reviews, we visit firms, review files and more widely share our findings. If we see standards falling short of what we expect, we can take action and refer the matter for an investigation, if necessary.
• Our Transparency Rules are there to help the public make informed decisions when choosing a legal services provider. As part of our proactive work, we have carried out reviews of more than 2,000 firms in the course of a project to check compliance with the rules. Since we started this work in mid-2023 and until the end of the 2024/25 year, we have issued 838 warnings to firms and 55 FFPs.

Proactively regulating anti-money laundering and the sanctions regime

• Preventing money laundering is a priority for the legal sector. We have a rolling programme of inspections to ensure firms' compliance with the money laundering regulations.
• In 2024/25, we made increasing use of data to monitor how law firms manage the risk of money laundering. Our 2024 data collection exercise provided valuable insight into the way firms are affected by the UK sanctions regime. It also allowed us to limit our sanctions checks to those firms directly affected and to take a risk-based approach to our inspections.
• We have significantly increased our proactive activity to identify and address non-compliance, and to support firms in moving into compliance. We increased the proactive engagements (inspections and reviews) we carried out by just over 50% - numbers rose from 545 in 2023/24 to 833 in 2024/25. Around one-third of the 833 firms (270) were found to be non-compliant. This compares to around a quarter of firms in 2023/24. It is important to note that this percentage relates only to the firms we reviewed during the reporting year, not the overall population of firms.
• This higher proportion does not necessarily indicate that firms' anti-money laundering work is deteriorating. As the money laundering regulations have been in place for some time, we are now uncovering breaches that have persisted over longer periods - an aggravating factor in non-compliance. Approximately 50% of non-compliant firms were referred due to missing or ineffective client/matter risk assessments.
• As noted above, our AML work is reported to a different financial year, so these figures cover 6 April 2024 to 5 April 2025.

Objective three: we will support innovation and technology

Developing understanding and safe testing

• In 2025, we authorised the first AI-driven law firm to provide regulated legal services. The new firm, Garfield.Law Ltd, offers small and medium-sized businesses the use of an AI-powered litigation assistant to help them recover unpaid debts.
• Before authorising this firm, we collaborated closely with the owners to make sure it could meet our rules, seeking reassurance around quality control, client confidentiality and safeguards against conflicts of interest. Since authorisation, we have stayed in regular contact with Garfield.Law to monitor potential risks and to assess the benefits that new innovative models can bring to consumers and the wider market.
• We are encouraging the development of new approaches and models due to the potential consumer benefits. AI-driven legal services could deliver better, quicker and more affordable legal services. We have made sure there are appropriate checks in place so that consumer protections are not diluted.

Supporting small firms to adopt appropriate technology solutions

• We published our research into sole practitioners' and small firms' use and adoption of technology and innovation. It found that while firms were keen to embrace new technology, they still faced barriers to adoption. The report also included detailed case studies that provided practical insights into the challenges and opportunities these firms face when adopting technology. The findings are helping shape our future engagement and support for this segment of the market.

Collaboration

• We progressed our work on innovation and AI, including further development of our regulatory approach in response to rapid technological change and evolving government policy. We published case studies to help support our regulated community, particularly small-sized firms, in understanding innovation and commissioned research to explore the rise of consumer-facing AI and the challenges it presents. We remained active in cross-regulator and government-led forums, including the LawtechUK Regulatory Response Unit and the Information Commissioner's Office's Regulators AI Working Group.
• We continued to deliver targeted external events for small firms. These events brought together legal professionals, tech providers and regulators to offer practical advice and insights on innovation in the legal sector. More than 180 delegates attended our Innovate events, with 91% saying they found them useful or very useful, and 90% agreeing the event supported their general knowledge on the issues discussed.

Objective four: we will be an authoritative and inclusive organisation, meeting the needs of the public, consumers, those we regulate and our staff

Consumer information

• Complaints are a key indicator of quality in legal services. Each year, we publish data to raise awareness and standards in complaints handling. In addition to policy work on complaints we have carried out, we have also been progressing work on the development of other quality indicators, fostering relationships with digital comparison tool providers around our updated voluntary Code. We continue to explore how we can build on our engagement with such providers, alongside CILEX Regulation and the Council for Licensed Conveyancers.
• We are also making sure we seek to measure levels of consumer awareness of such tools by including questions around these in the five-year evaluation of our Transparency Rules, which is scheduled to be published in 2026. As a quality indicator of law firms' work, we have also worked with HM Land Registry on its plans to publish more data about law firms to help with land registration. This data can act as a quality indicator as it can show how error rates can differ by firm. Errors can increase delays in registering properties.
• In the 12-month period to October 2025, we completed the design and build stages of a new digital product. Its aim is to help legal services users search for providers in England and Wales, regardless of regulator. We have developed a beta version of the product, which we are testing with a limited number of users to get feedback and improve it, before we move onto a full public launch.
• We continue to see increases in the number of visitors to our consumer-facing web pages. Our Solicitors Register is particularly popular, attracting 9.4 million views in 2024/25 - an increase of 3% compared to 2023/24. Ninety-nine per cent of approximately 4,000 users said they found this content useful when asked. Views to our website scam alerts - a well-used page to inform members of the public about people who call themselves solicitors but are not - also increased. Visits went up by 15%, from 192,000 in 2023/24 to 220,000 in 2024/25.
• Legal Choices is the public-facing website and social media presence we manage on behalf of all legal regulators in England and Wales. The website aims to help members of the public if they come across a legal problem and has information concerning legal issues and legal advisers. The number of visits to the website was 1.9 million, up 19% from 1.6 million in 2023/24.

Equality, diversity and inclusion (EDI)

• We have made progress in following up on our published research on the potential causes of differential outcomes by ethnicity in legal professional assessments. We developed and published an action plan following feedback from stakeholders at the summit we held in October 2024. We have gathered insight from candidates on further support or insights that would be of benefit. We have mapped existing collaborations between law schools and law firms, so we can explore the potential for further partnerships. We are also running a regular forum for relevant stakeholders to continue conversations and share good practice and research. Kaplan, the SQE assessment provider, has run workshops and published guidance on developing multiple-choice questions of the type used in SQE1.
• We have engaged with a range of stakeholders about the findings of our research on the overrepresentation of Black, Asian and minority ethnic solicitors in the early stages of our enforcement processes. With the research finding that firm size was an important factor, we made a commitment to direct resources to smaller firms to support compliance, starting with a webinar on AML for sole practitioners. We are implementing the suggestions made by the universities to further strengthen our assessment processes, which the researchers found were: 'for the most part, as robust as they can be'. We are finalising a plan to coordinate the ongoing actions we are taking forward to address these issues.
• We have continued our work to encourage diversity at senior levels in law firms, providing resources to promote best practice. We held a webinar to promote best practice on ethnicity pay gap reporting and engaged with law firms to identify best practice and case studies to create resources on race equality in the workplace and on pay gap reporting. We are continuing to monitor diversity in the profession and collected diversity data from law firms in 2025, the findings of which we will publish in early 2026.

Investigation and enforcement - timeliness of work

• When we receive reports of concern about solicitors and law firms, we aim to assess 80% of them within two months. We hit this target for all four quarters in 2023/24. However, 2024/25 saw a significant and sustained increase in the number of reports we received. In 2024/25, the average number of concerns we received per month increased by 34% compared to the previous business year, rising from 1,024 to 1,375. This means we did not meet this target in the 2024/25 year, and we have not met this target since October 2024.
• We put in place additional measures to manage this increase in 2024/25, including improved ways of working and additional temporary resource. This increased the average number of reports resolved by 28% in 2024/25 compared to the previous business year, from 982 to 1,253 per month. However, the increased resolution level has still not met the increase in volumes.
• We have plans in place to deliver further additional short-term improvements and increase resource. We have also started a strategic improvement project that aims to transform the experience for those who wish to report a concern of misconduct.
• In 2024/25 we generally met or exceeded our target for completing investigations:
  • 93% of investigation cases within 12 months - we hit this target in 11 of the 12 months, compared to all 12 months in 2023/24
  • 95% of investigation cases within 18 months - we hit this target in 11 of the 12 months, compared to all 12 months in 2023/24
  • 98% of investigation cases within 24 months - we hit this target in 10 of the 12 months; this is the same as in 2023/24.
• A key priority for us in improving both the timeliness and quality of our work has been to reduce the number of longstanding investigations. We have made good progress on this: in October 2023, we had 161 cases which were more than 24 months old. We reduced this to 60 such cases by October 2024 and reduced this number further to 40 in May. Since then, it has risen slightly, with 60 such cases in October 2025.
• We are, however, anticipating an impact on the above investigation casework measures in 2026 due to the increase in concerns reported to us. In 2024/25, the average number of investigations opened per month increased by 45% compared to the previous business year, rising from 165 to 239. As with managing the increase in concerns, we are taking steps to address the consequent increase in investigations, through improvements and additional temporary and permanent resource. In 2024/25, we increased resolutions by 31% compared to the previous business year, from an average of 158 to 207 per month.

How we communicate

• In September 2025, we completed a project that addressed recommendations from an independent audit of our website. The changes focused on usability and making our messaging clearer. The project improved the overall quality of the user experience and improved how we communicate about our work.
• With our Contact Centre already accredited by the Institute of Customer Service, we extended our customer service plans into more operational areas of the business. We extended our 'voice of the customer' initiative into our Client Protection team, which, among other responsibilities, deals with interventions and compensation fund claims. This has enabled us to obtain customer feedback on the application process for making a claim on the compensation fund.

Attracting talent from all backgrounds

• In December 2022, alongside publishing our ethnicity pay gap report for the first time, we committed to developing an action plan to significantly improve ethnic diversity at senior levels, recognising that much of what we do to drive change at this level will also help at other levels. We have made progress on this action plan, and along with reverse mentoring initiatives, monitoring our data and other measures, in October 2025 15% of our leadership roles are held by individuals from a Black, Asian or minority ethnic background. This is against a target we set ourselves of 16% by 2026.

Improving how we work

• Through our Continuous Improvement Programme, colleagues completed dedicated programmes designed to build on their practical skills in problem-solving and process improvement. Lessons-learned sessions have been consistently embedded across projects, informing how we plan and deliver future work. Alongside this, our Ideas Review Group has played an active role in helping teams identify, evaluate and implement local improvements.

Insights and influence

• We launched a high-volume consumer claims campaign in late 2024 to support the public in their understanding of the risks of 'no win no fee' agreements and address poor practices in this area. On YouTube, our in-stream video ads about the risks and red flags of these agreements generated 160,000 engagements, including more than 120,000 views. Our online consumer guidance has been viewed more than 230,000 times and now appears as one of the top AI-generated searches for 'no win no fee' on Google. We have actively promoted this campaign: since December 2024, nearly 100 media articles across national and regional news media, as well as the consumer and legal trade press, have referenced our work on 'no win no fee'.
• As discussed under objective one, following the start of our Consumer Protection Review, we published our consultation on client money. We received more than 450 responses to the consultation, gathering wide-ranging feedback and views from our stakeholders. Around 300 stakeholders attended 18 events or discussions with us, and our online campaign made 136,000 impressions and 12,000 engagements across social media.
• With the aim of driving change in the way solicitors and firms take account of complaints to improve consumer outcomes, we carried out significant stakeholder engagement work on first-tier complaints. Between January and March 2025, we carried out a thematic review of first-tier complaints handling, visiting 25 firms and reviewing 50 complaints files. We also surveyed over 700 firms covering a diverse range of characteristics and areas of work. Between May and August 2025, we consulted on changing our requirements. We received 75 written responses to the consultation. We also undertook an engagement programme running three focus groups with consumers from a range of backgrounds and experiences of legal services, a roundtable with 14 consumer organisations, including those that represent people who may be vulnerable by their characteristics or circumstances, and roundtable events with solicitors, law firms and law societies. Any regulatory changes would come into effect following approval by the LSB.
• Our first corporate strategy benchmarking survey aimed to better understand how we can best achieve our strategic mission - to drive confidence and trust in legal services - as well as benchmark views so we can assess progress over the life of the strategy. In 2024 we commissioned independent researchers to survey around 3,400 stakeholders to assess what drives confidence and trust in legal services. We spoke to the legal profession, the public, small and medium-sized enterprises, elected representatives and other opinion formers. In 2025, we carried out a one-year-on 'pulse' survey with 3,100 stakeholders from these same groups, with a smaller set of questions to identify any trends. Overall the picture is similar to 2024, with confidence and trust in legal services remaining fairly high - for instance, 8 out of 10 legal professionals and SMEs are positive, and around 7 out of 10 consumers. The factors driving that trust, such as high standards and high-quality qualifications, were consistent with 2024. These insights have continued to help inform and shape our work.
• In the past year, we have been recertified to ISO 14001:2015 - which is the international standard that specifies requirements for an effective environmental management system. We have continued to meet the expectations set within it. We continue to work with our external third-party partner Carbon Footprint on how to make environmental efficiencies - effectively tracking emissions, following regulatory requirements and advancing our pathway to net zero. We continue to engage with our staff on environmental issues.

Financial review

This financial review looks at the SRA's and the Solicitors Indemnity Fund (SIF)'s activities and income and expenditure. The balance sheet review looks at the assets and liabilities of the SRA and the SIF.

Income

The majority of our funding comes from annual fees set each year. We charge these fees to individuals (primarily the practising certificate fee) as well as to firms (recognised bodies and licensed bodies). These are mandatory and must be paid for by individuals and firms to practise as solicitors in England and Wales.

These fees are invoiced from 1 October to cover the following November to October period. Therefore, the fee income recognised in the 2024/25 year was largely collected before the start of the financial year. The amount recognised in the financial year was £72.1m (2024: £68.1m). At the end of October 2025, there were 176,972 practising solicitors and 8,987 solicitor firms (2024: 171,697 and 9,197 respectively). The types of these firms range from sole practitioners to large firms with a global presence and thousands of solicitors. There is a long-term trend of an increase in the number of practising solicitors and a gradual reduction in the number of firms.

Not all solicitors are currently practising law. There were more than 212,000 solicitors on the roll at the end of October 2025. Non-practising solicitors who wish to remain on the roll of solicitors pay a small annual fee. At the end of October 2025, there were 35,446 non-practising solicitors on the roll (2024: 35,090).

For 2024/25, the individual practising certificate fee was set at £307, which remained unchanged from 2023/24. We keep around half the fees collected. We collect a proportion on behalf of TLS, to fund elements of its work, and levies payable to external bodies, including the LSB and Legal Ombudsman. TLS's share of the practising fee income is reported in The Law Society Group's consolidated accounts. Around £163 (2024: £162) of the 2023/24 fee funded our work. Our portion of the 2024/25 fee remained approximately 53%.

Fees for firms vary and are related to the turnover of each firm. The 2025/26 fee collection window opened on 1 October 2025 and closed on 31 October 2025. On 31 October 2025 £82.3m (2024: £68.3m) worth of invoices had been raised and recognised as deferred income for the 2025/26 renewal year. This means the amount invoiced will appear in the statement of comprehensive income in the 2025/26 financial statements. The amount invoiced will appear alongside the expenditure for the year, which the amounts raised will fund.

In addition to the practising fees, a levy is collected on behalf of the SRA Compensation Fund (compensation fund). The compensation fund is a non-consolidated entity which funds compensation claims against defaulting practitioners and related management costs. All individual practising certificate holders and all firms holding client money pay contributions towards the fund, except for those working for the Crown Prosecution Service. The above figures exclude invoices raised and cash collected on behalf of the compensation fund. Information on the compensation fund is available in its financial statements.

Other income

We collected £3.9m in administration fees for applications other than for practicing certificates from individuals and firms (2024: £4m).

We recognise income from recharging the costs of managing the compensation fund (administration, maintenance, applications). This totalled £20.1m in the financial year (2024: £15.6m). These costs are recharged to the fund in accordance with an agreed methodology and cost allocation rates. The most significant element of the recharge relates to third-party intervention and our own legal costs, which totalled £15.1m (2024: £11.7m). Other costs include indexing, archiving and storage of the files of the firms we intervene into.

We recovered costs awarded to us by the Solicitors Disciplinary Tribunal following enforcement action of £2.9m (2024 restated: £5.3m). The prior year income was restated as is explained in note 25 of the financial statements.

Education and training

The main component within education and training income is the SQE. This is the assessment aspiring solicitors need to take to qualify. The SQE is provided by Kaplan SQE Ltd, working with us and on our behalf. During the financial year, we recognised £45.3m (2024: £36.6m) in income related to assessment and delivery costs of £44.6m (2024: £36m). This is in addition to the internal costs associated with delivering the exam. We expect the SQE income and expenditure figure to continue to increase over the coming years as more candidates sit the examination.

To be eligible to provide education, research or vocational training - specifically the delivery of the SQE - any surplus from supplying these services must only be used for the continuation or improvement of such services.

In addition to the examination delivery costs, we also incur internal costs through our Education and Training team. The work this team does supports the SQE delivery, as well as our other education and training activity. The overall cost of this team is greater than the income we receive, and no surpluses have been realised to date. If we received a surplus, we would separate it and invest it solely in education and training, and not any other area of our responsibilities.

Solicitors Indemnity Fund (SIF) consolidation

The SIF is a special purpose entity set up in 1987 to provide compulsory professional indemnity cover to all solicitors. In 1999 TLS decided to move to an open market professional indemnity insurance (PII) system and so SIF stopped receiving premiums and stopped providing primary PII cover to solicitors. However, using residual funds that had been collected from previous years, TLS decided that, for a time-limited period, the SIF would continue to provide run-off cover to solicitors and firms who had been closed for more than six years (and were therefore beyond the period of mandatory run-off cover required under the new system).

Responsibility for indemnification arrangements was delegated to the SRA in 2006, at which point it took over responsibility for governance of the operation of the SIF from TLS. On 1 October 2023, the SRA took over the management of the SIF, to provide assurance of future consumer protection for post six-year negligence claims and achieve a reduction in the scheme's running costs compared to the previous arrangements, so that more money would be available for SIF's core purpose of settling claims.

From 1 October 2023, the SIF became a subsidiary of the SRA, with its financial statements consolidated in these SRA group financial statements. The SRA's financial statements can be seen in isolation in the:

• company income and expenditure statement,
• company statement of comprehensive income and company balance sheet, and in the
• company-only columns of the notes to the financial statements.

From 1 October 2023 the SRA took over responsibility for managing and administering SIF, a function previously undertaken by Solicitors Indemnity Fund Limited (SIFL). In doing so, the SRA effectively took control of the SIF and the SIF and SIFL became subsidiaries of SRA from this point. SRA and SIF are therefore consolidated within these financial statements (SIFL ceased trading in 2024 and was dissolved on 25 February 2025). Any transactions of SIFL within the financial year are included in the consolidated results.

This year, the post-tax consolidated deficit is £1.9m (2024 restated: £4.6m surplus).

Fair value of SIF net assets

From 1 October 2023, we took responsibility for managing and administering the SIF. The fair value of the SIF's net assets has been consolidated within the financial statements of the group. As a public benefit entity, we recognised this fair value in our income in 2022/23. The fair value of the net assets as of 1 October 2023 was £20.6m. This had increased to £23.7m at the end of October 2025.

Expenditure

Our total operating expenditure for the SRA for the year was £150.8m (2024 restated: £123.7m). This increase is partly because of increased SQE costs, which were recovered via SQE fees, leading to the related increase in income. In addition, SRA staff related costs for the year increased to £52.0m from £45.2m in the prior year. This rise is due to a 12% increase in headcount to deliver increased activity. There was also an increase in the costs of administering the compensation fund, which, as noted above, were recovered from the compensation fund.

The SIF's operating credit for the year was £0.8m, the majority of which arose on the movement in the value of its indemnity provisions. In the 2023/24 year, there was £4.0m cost on operating expenditure, again due to the movement in provisions.

Fixed assets

Group tangible assets decreased in value, from £1.6m to £1.3m. This was due to investment in computer equipment (£0.3m), being exceeded by a depreciation charge in the year of £0.6m.

Group fixed asset investments have increased by £7.4m to £46.5m. The SRA's investments increased by £5.4m (55%). The SIF's investments increased by £2.0m (7%).

The SRA's investment holdings represent long-term reserves and are not needed to fund day-to-day operations. They are invested with Cazenove, with the objective of achieving a long-term return on investment.

The group's investment strategy is to hold a varied and diversified portfolio to maximise returns at a level of risk agreed by the directors. The group holds an investment portfolio consisting of equities, sovereign and investment grade bonds, as well as other securities and cash. This provides the group with a constant income from investment. There remains volatility in the underlying value of the funds within the investment portfolio, which is accounted for as either an unrecognised loss or gain in the Statement of Comprehensive Income. Further details are provided in note 10.

Debtors

Year-end trade debtors are at their highest following the annual practising fee renewals exercise, undertaken during October, and reduce rapidly in November each year. Group debtors have reduced by £6.7m from £36.1m in 2024 (restated) to £29.4m in 2025. This is due in part to earlier receipt of annual practising certificate income which meant that the trade debtors were £21.1m, £8.0m lower than the restated figure of £29.1m in 2024.

Cash

Cash balances are also at their highest level following the annual practising fee renewals exercise in October 2025. The cash balance at the end of the year is therefore higher than at most times during the year. Cash flows continue to be positive in November and then gradually reduce through the remainder of the financial year, with a relatively smooth flow of annual expenditure until the next renewal period. Under our investment policy, we aim for our cash balances to be actively managed to maximise returns as much as possible while limiting the risk to funds. The average cash balance held during the year was £66.9m (2024: £55.8m).

Provisions

The company provision for disciplinary proceedings, intervention and litigation costs as of 31 October 2025 was £16.0m (2024: £14.0m). The provision represents the cost of fees to complete ongoing matters at the year-end. Costs incurred during the year in relation to interventions are recharged in full to the compensation fund.

The consolidated balance sheet includes a total SIF claims provision of £9.4m (2024: £11m). This provision is for current and future claims against SIF and the cost of dealing with those claims. The provision for claims incurred but not reported is for claims not yet received against SIF but expected to be received in the future in relation to events that have already occurred. This is estimated using external actuarial advice, based on all available information at that time, including historic trends and recent developments and amounts to £5.5m (2024: £4.4m). Further information is provided in note 2 r) and note 3 of the financial statements. The remainder of the provision includes £1m (2024: £2m) for claims reserves and £3.0m (2024: £4.6m) for claims handling costs.

Reserves

Group reserves

The group balance sheet reports net assets of £46.9m, up from £46.3m in 2024 (restated). The company balance sheet shows net assets of £23.3m (2024 restated: £26.2m), of which £21.9m (2024 restated: £24.6m) is unrestricted reserves once tangible fixed assets are excluded.

The reserve requirements of the SIF are very different in nature to those of the SRA and need to be considered separately. SIF had net assets of £23.7m at the balance sheet date (2024: £20.1m), and a surplus for the year of £3.6m (2024: £0.1m). A reserves policy was established during the 2023/24 financial year and is presented below.

The reserves of SRA can only be used to fund the operations of the SRA, and the reserves of the SIF can only be used to fund the operations of the SIF. Reserves are not transferable between the SRA and the SIF. Additionally, to be considered an eligible body for the delivery of education activities, any surpluses in the future arising from these activities can be used only for the continuation of such activity.

Company reserves

Our reserves policy for the SRA outlines a requirement to hold between £17.7m and £25m of unrestricted reserves after tangible fixed assets are excluded. The policy is guided in part by guidance issued by the LSB, which regulates the SRA. The policy identifies the long-term level of reserves considered appropriate, with consideration of:

• potential reductions in income
• additional liabilities that may arise or commitments that may be made
• the risk of unexpected expenditure in relation to legal costs
• planned increases in expenditure.

The reserves range represents between approximately three to five months' expenditure for the financial year when the policy was agreed and excludes costs and recharges to the compensation fund and SQE income and expenditure. This is appropriate because the SQE and compensation fund income and expenditure are almost entirely cost-neutral activities. The SQE income and expenditure is expected to grow significantly in future years.

Our Board considers the reserves position each year. It last reviewed and agreed the position in April 2025. We must outline our reserves policy and any plans to move towards the minimum level of reserves (if not already at that level), as part of the annual approval of practising fees. This is an LSB requirement. We will consult on the fees for 2026/27 in the summer of 2026. As mentioned above, unrestricted reserves (excluding fixed assets) stand at £21.9m, which is within the targeted reserves policy.

The SIF reserves

The reserves policy for the SIF considers total assets less current liabilities as a proxy for a specific general reserves figure that is net of claims provision. The policy is for this to be between 50% and 400% of the last claims provision value provided by independent actuaries. For the 2024/25 year and until we have an updated independent actuarial valuation, this represented a value range of from £4.7m to £37.7m. At 31 October 2025 SIF's total assets less current liabilities were £33.1m, which is within the policy range.

Financial key performance indicators

The directors consider that the key financial performance indicators are as follows:

• consolidated income for the year was £144.3m (2024 restated: £129.6m)
• consolidated operating deficit for the year was £5.3m (2024 restated: surplus of £2.8m)
• company unrestricted reserves (net assets less tangible fixed assets) as of 31 October 2025 were £21.9m (restated 2024: £24.6m)

Risk governance and management

Our risk management framework sets out the policy and framework for managing and obtaining assurance on all risks likely to adversely impact on the successful delivery of our strategic and regulatory objectives.

It provides the guiding principles within which the risk management process is managed and operated. In accordance with that framework, we maintain risk registers at three levels:

• high-level risks are documented on our strategic risk register
• a mid-tier risk register brings together significant legal services market or organisation-wide risks which are not at the strategic level
• both the strategic and mid-tier registers are underpinned by operational risk registers across the organisation.

The principal risks relate to delivery of crucial areas of work, such as investigations and enforcement, our approach to emerging technology, EDI and risk-based regulation.

To support the transparency of a structured risk reporting cycle, the strategic risk register is presented to our Audit and Risk Committee and Board three times a year. The Audit and Risk Committee also reviews the mid-tier risk register. Management of both these registers sits with the Executive Team, which monitors them regularly.

We continued to enhance risk governance and management systems during this period. The most significant change has been incorporating market risks within the existing risks management framework (as detailed above).

We have been ever mindful of the increasing cyber security risk, as faced by most other organisations. We have successfully re-certified to the ISO:27001 standard in information security and apply all the controls contained within.

We continue to invest in our technical resources and capabilities to deal with existing and emerging risks as effectively as we can. This includes testing and scenario planning to prepare for incidents.

Statement of compliance with section 172 (1) of the Companies Act 2006

Directors' duties

The directors must act in a manner which complies with their duties as set out in the UK Companies Act 2006. In summary, section 172 of the Act requires a director of a company to act in a way they consider, in good faith, would most likely promote the success of the company for the benefit of its members. In doing this, the director must have regard, amongst other matters, to:

• the likely consequences of any decision in the long term
• the interests of the company's employees
• the need to foster the company's business relationships with suppliers, customers and others
• the impact of the company's operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct
• the need to act fairly between members of the company.

The following is an overview of how the Board has performed its duties in this regard during the year.

Key decisions

A number of important decisions were made during the financial year:

• In April 2025 the Board agreed that we should make technical changes to our financial penalties guidance relating to the Economic Crime and Corporate Transparency Act (2023). Making these adjustments enabled the SRA to make immediate use of the unlimited fining powers granted by ECCTA for relevant misconduct and avoid having to make referrals to the SDT in such cases. The Board also agreed that going forward we should use domestic, not global, turnover as the basis of all firm fines where this information is available.
• In July 2025 the Board decided that there would be an increase in the SRA's share of the individual practising certificate fee for 2025/26, from £164 to £190. It also decided that the 2025/26 Compensation Fund contribution would decrease from £90 to £70 per individual and £2,220 to £1,950 per firm. This followed public consultation and was approved by the LSB in September 2025.
• In September 2025 the Board agreed the proposed approach for the reporting cycle of risk, including oversight of the Risk and Intelligence Framework, through to the ARC and the Board. This delivered the first action due under Direction 1(a)(i) of the Directions issued by the Legal Services Board as a result of the independent review of our actions in the lead up to the closure of Axiom Ince.
• In September 2025 the Board also agreed the proposed criteria to be used to assess whether issues should be reported to the Board, including whether a short notice Board meeting should be called outside of the scheduled Board meeting cycle or reported through performance reporting and the CEO report.
• Also in September 2025, the Board agreed changes to the Risk Management Framework including market risk impacts and the 'Guidance on regulating to prevent harm' which set out our approach to thinking about harms as the basis of identifying and prioritising action to address external risks, including market risks, which is a key element of the risk assessment process. This also partially met the requirements of Direction 2(a)(i) of the Directions issued by the Legal Services Board as a result of the independent review of our actions in the lead up to the closure of Axiom Ince.
• The Board agreed the Business Plan and funding level for 2025/26 in September 2025, subject to it being updated to take account of consultation feedback and to reflect current pressures.

People

Our people are fundamental to the successful performance of the organisation. Employees are regularly kept updated through monthly organisation-wide business updates which provide an opportunity to feedback on key business activity and upcoming changes. The staff forum and staff trade union offer employee representatives regular access to members of the senior management team to address important and topical issues. The structure of annual pay awards is agreed with the trade union each year. Union members are consulted before any decisions are made.

Throughout the year, the Board receives regular updates on matters relating to employees as part of regular performance reporting. An annual staff survey offers employees the opportunity to provide their views in an anonymous format. The results of these surveys are provided to the Board and clear action plans are developed and delivered based on the feedback. In this reporting year, we supplemented the annual staff survey with a small number of pulse surveys, providing a deeper dive into particular issues to give greater insight.

We expect the law firms we regulate to create and champion an equal and diverse culture, and we make sure we do the same. We expect our staff to consider EDI throughout their work, whatever their role, and our staff networks help to promote a culture of inclusion. We have active networks for women, race ethnicity and cultural heritage, sexual orientation and gender identity, carers and working parents, mental health and disability, and men's health and wellbeing. We also have mental health first aiders.

We promote inclusion for all staff through our EDI policy, which covers our values and behaviours, attraction and retention, reasonable adjustments and how we support the health, and wellbeing needs of our staff. We refreshed our values as part of preparing and launching our new 2023–2026 corporate strategy. We retained our commitment to inclusion in our fourth strategic priority within the corporate strategy (to be an authoritative and inclusive organisation, meeting the needs of the public, consumers, those we regulate and our staff).

Our training and other initiatives to promote career development are made available to all staff. We also track a range of employment areas throughout the employment lifecycle to make sure these opportunities are being accessed fairly by all groups.

We monitor the diversity of our staff, covering all the diversity characteristics we collect from the profession and publish an annual breakdown of the data. This includes questions about socio-economic diversity and caring responsibilities. We publish our gender pay gap data as we are required to do, and we continue to publish our ethnicity pay gap. We have an underrepresentation of Black, Asian and ethnic minority staff at senior levels in our workforce. We have published targets to double the number of people within our senior team from these backgrounds from eight to 16 per cent within five years and 20 per cent by 2032. We also have an action plan in place to address this.

We are a disability confident level 2 employer, which enables us to make the most of the opportunities provided by employing disabled people.

Work with other regulators

We work with the LSB, the oversight regulator of legal services in England and Wales, and under its rules, including the Internal Governance Rules 2019. These safeguard the independent exercise by approved regulators of their regulatory functions. We also work with the Office for Professional Body Anti Money Laundering Supervision. It supervises the professional body supervisors, such as the SRA, to make sure they are providing high standards of AML supervision. We also have significant engagement with the other eight legal sector regulators in England and Wales, as well as with regulators such as the Immigration Advice Authority, Information Commissioner's Office and the Financial Conduct Authority. We are an associate member of the UK Regulators Network (UKRN).

Consulting on our business plan and wider consultation work

Our business plan and budget for 2025/26 were approved during the year. Both were consulted on through a multi-channel approach, using traditional media and digital channels, including a launch webinar, social media and e-newsletters. We also held direct engagement with a wide range of stakeholders through discussions and roundtables. Our aim was to raise awareness of the consultation, encourage formal written responses, while also gathering feedback through direct engagement and on specific points through social media.

The Board considered the responses to the consultation in July 2025 before making a decision on the final funding level and business plan for the 2025/26 year.

The funding level, alongside that of TLS, determines the level of practising fees paid by the regulated population. The Board approved the practising fee level on 7 July 2025, ahead of LSB approval.

Any significant changes to the way in which the profession is regulated or any changes which may significantly impact the profession are subject to consultation before decisions are made. During the reporting period we consulted on a number of issues:

• Arrangements for the regulation of non-authorised CILEX members
• Changes to the rules on SQE exemptions
• Proposals to change how the English or Welsh language proficiency of qualified lawyers is assured
• Business plan and funding level 2025/26
• Arrangements for SRA regulation of CILEX members
• Financial Penalties: further developing our framework.

All current and previous consultations are available on our website.

Members

TLS is the sole member of the company. The company is committed to successfully performing and discharging any and all functions as delegated or conferred upon the company by TLS.

Supplier relationships

To successfully manage the business, strong relationships are maintained with key suppliers. The organisation expects suppliers to conform to its code of conduct to ensure good practice across its supplier base. Regular engagement is sought from suppliers on both commercial matters and other considerations, such as:

• environmental issues
• EDI
• innovation
• building resilient partnerships
• reinforcing the importance of the organisation's commitment to high standards of behaviour, both for itself and its suppliers.

Modern slavery encompasses the offences of slavery, servitude, forced and compulsory labour and human trafficking. As the regulator of solicitors and law firms in England and Wales, we have an important role in supporting the rule of law and the administration of justice, and so we fully support the government's commitment to tackling this issue. Given the nature of our work, our main risk is our supply chain. We have in place robust procurement processes to manage this risk. We expect any supplier we work with to have suitable policies, processes, and compliance in place within their own organisation to prevent child labour, modern slavery and human trafficking. We will continue to develop this in the future, ensuring staff are aware of these risks and can easily raise any concerns.

The Board of Directors consider, both individually and collectively, that they have acted in a way they consider, in good faith, would be the most likely to promote the success of the company for the benefit of its members (having regard to the stakeholders and matters set out in section 172 (1) of the Act) in the decisions taken during the year ended 31 October 2025.

This Strategic Report was approved by order of the Board on 21 April 2026.

Signed by:

Anna Bradley
Chair

28 April 2026

The directors present their report and the audited financial statements of the company for the period 1 November 2024 to 31 October 2025.

Directors

The directors during the reporting period and up to the date of signing were as follows:

		Attended	Meetings
Anna Bradley (Chair)		6	6
Ann E Harrison		5	6
Lisa Mayhew		5	6
Vikas S Shah		6	6
Elizabeth H Smart		6	6
Nicola Williams		6	6
Claire Bassett		6	6
Rob McWilliam		5	6
Paul B Loft	Until 31 December 2024	-	-
Selina Ullah	Until 31 December 2024	-	-
Claudio Pollack	From 1 January 2025	6	6
Simon Millhouse	From 1 January 2025	6	6

The SRA maintained liability insurance for its directors and officers throughout the financial year.

The Board

We had a Board of 10 directors for this reporting period, two of whom subsequently completed their terms on 31 December 2024, with two replacements appointed from 1 January 2025.

The Board Chair, Anna Bradley, was appointed for a further term of two years from 1 January 2025. Appointments and reappointments to the Board are governed by our Board composition and appointments protocol. This forms part of our governance handbook (PDF 124 pages, 2.36MB) which is available to view on our website.

All appointments to the Board, including the appointment of the Chair, are made on merit following open and fair competition, with no element of election or nomination by any particular sector or interest groups. Our Board makes appointments on advice from an appointment panel. The Nomination Committee selects appointment panel members each time a recruitment round is held.

The Board makes decisions on the reappointment of directors, taking advice from the Nominations Committee. The Committee is guided by objective annual appraisals and the desirability of ensuring a balance between regular turnover and continuity. Appointment to the post of Chair (including the selection criteria and make-up of the appointment panel) is made by the Board, advised by the appointment panel which are established by the Board on the advice of the Nomination Committee.

A proposal to reappoint an existing Chair must have Board support. The decision to reappoint the Chair, including the length of the term to be served, was recommended by the Board to a panel for ratification.

Board member remuneration was £18,000 per annum. Chairs of committees receive an additional £7,500 per annum, as does the Senior Independent Director. The Board Chair remuneration was £105,000 per annum.

The Chair is contracted for a minimum commitment of two days per week and Board members for 20 days a year.

The performance of all Board members is considered on an annual basis through an appraisal process conducted against an appraisal framework.

Board meetings

The Board held six formal meetings during 2024/25. These included five meetings in person: four in London and one in Liverpool. Board papers and minutes are published on the SRA website.

The Board has continued to hold regular workshop sessions (including two in Birmingham). These provide the opportunity for engaging with external parties and more free-ranging discussion of particular issues in advance of the Executive formulating more formal proposals for the Board to consider.

Board transparency

The Board maintains openness of its decision-making so that the public can see that decisions are properly made. This includes:

• publication of a full accountability statement that sets out where our powers derive from, to whom we are accountable, including the public and profession, and how we discharge that accountability
• publication of a Board transparency statement which describes how we share information about the Board, how it works and makes decisions, our meeting papers and what we can publish, what we cannot, and why
• Board minutes and publication of papers and a Chair's blog post meetings
• publication of a Board decision-making framework setting out the factors the Board considers when making its decisions.

Delegation

We have in place a Board delegation framework which sets out how the Board, Committees and Executive Team work together to discharge the SRA's functions. The Board has three committees: the Audit and Risk Committee, the Remuneration Committee and the Nomination Committee.

The Audit and Risk Committee provides assurance to the Board on matters including:

• the effectiveness of systems to identify and manage risk
• the effectiveness and independence of the internal and external audit processes
• the effectiveness of systems of internal control
• the integrity of the company's financial statements and management accounts.

The Remuneration Committee advises the Board on policies relating to the remuneration of non-executive Board Members, committee members, the Executive Team and the wider workforce.

The Nomination Committee oversees and advises the Board on matters relating to the appointment, reappointment and removal of non-executive directors and the Chief Executive and the effectiveness of the Board.

The Board delegated the day-to-day operational management of the company during the year to the Executive Team, which comprised of:

• Paul Philip: Chief Executive Officer
• Aileen Armstrong: Executive Director - Strategy, Innovation and External Affairs
• Liz Rosser: Executive Director - Operations and Resources
• Juliet Oliver: Executive Director - Investigation and Enforcement and General Counsel (until April 2025)

Paul Philip retired on 31 October 2025 and Sarah Rapson became the Chief Executive Officer (CEO) on 1 November 2025.

Nomination Committee Annual Report

The Nomination Committee report for the financial year ended 31 October 2025 provides an overview of the work of the Committee and the key matters it addressed over the year. The Committee supports the Board in discharging its responsibilities including on the appointment and reappointment of non-executive directors and the Chief Executive.

The Committee's terms of reference are included in the Governance Handbook (PDF 124 pages, 2.36MB). The Committee Chair provides reports to the Board at Board meetings following each Committee meeting.

Key activities considered by the Committee during the year include:

• the appointment of two new non-executive directors
• the reappointment of three Board members
• the recruitment of a new Board Chair in 2026
• Executive Director succession planning
• recruitment of the new CEO
• management capacity at Executive Director level
• plans for a Board Effectiveness Review
• Board training
• the appointment of a new Senior Independent Director.

Role of the Committee

The role of the Nomination Committee is to oversee and advise the Board on matters relating to the appointment, reappointment and removal of non-executive directors and the Chief Executive and the effectiveness of the Board. Policies should be designed to promote the values and standards of the organisation and to support the sustainable delivery of its strategic objectives.

The Committee has confirmed to the Board that it has carried out its responsibilities to date in line with its terms of reference.

Membership and attendance

The members of Nomination Committee from November 2024 to October 2025 were:

		Attended	Meetings
Anna Bradley (Chair)		5	5
Ann Harrison		5	5
Paul Loft	Until 31 December 2024	-	1
Lisa Mayhew		5	5
Rob McWilliam	From 1 January 2025	4	4

The Committee met five times in 2024-25 on: 25 November 2024; 27 January 2025; 20 February 2025; 2 July 2025; and 22 September 2025.

Remuneration Committee annual report

The Remuneration Committee report for the financial year ended 31 October 2025 provides an overview of the work of the Committee and the key matters it addressed over the year. The Committee supports the Board in discharging its responsibilities including on the remuneration of non-executive Board Members, committee members, the Executive Team and the wider workforce.

The Committee's terms of reference are included in the Governance Handbook (PDF 124 pages, 2.36MB). The Committee Chair provides reports to the Board at Board meetings following each Committee meeting.

Key activities considered by the Committee during the year include:

• the policy for workforce remuneration
• remuneration of the new Chief Executive
• staff pension arrangements
• the policy for Equality, Diversity and Inclusion
• gender and ethnicity pay gap reporting
• a review of staff benefits
• Executive pay awards for 2023-24.

Role of the Committee

The role of the Remuneration Committee is to advise the Board on policies relating to the remuneration of non-executive Board Members, the Executive Team and the wider workforce. Policies should be designed to promote the values and standards of the organisation and to support the sustainable delivery of its strategic objectives.

At its meeting on 17 April 2025 the Committee reviewed its performance, constitution and terms of reference, as required by the terms of reference and agreed that given the significance of the pension, it would recommend to the Board that 'oversight of the pension arrangements for the wider workforce' be added to its Terms of Reference (This change was agreed by the Board).

The Committee has confirmed to the Board that it has carried out its responsibilities to date in line with its terms of reference.

Membership and attendance

The members of Remuneration Committee for the period November 2024 to October 2025 were:

	Attended	Meetings
Ann Harrison (Chair)	4	4
Liz Smart	4	4
Nicola Williams	4	4
Anna Bradley (usually in attendance)	2	4

The Committee met four times in 2024-25 on: 7 April 2025, 17 April 2025, 15 September 2025, and 27 October 2025.

Audit and Risk Committee annual report

The Audit and Risk Committee supports the Board in discharging its responsibilities including: the effectiveness of systems to identify and manage risk; the effectiveness and independence of the internal and external audit processes; the effectiveness of systems of internal control; the integrity of the company's financial statements and management accounts.

The Committee's terms of reference are included in the Governance Handbook (PDF 124 pages, 2.36MB). The Committee Chair provides reports to the Board at Board meetings following each Committee meeting.

Key activities considered by the Committee during the year include:

• management of risk (more detail on the organisation's work on risk is included elsewhere in this report);
• internal controls and internal audit, including the internal control environment;
• external audit and financial reporting.

Role of the Committee

The role of the Audit and Risk Committee is to advise the Board on: the effectiveness of systems to identify and manage risk; the effectiveness and independence of the internal and external audit processes; the effectiveness of systems of internal control; and the integrity of the company's financial statements and management accounts.

Membership and attendance

The members of Audit and Risk Committee for the period November 2024 to October 2025 were:

		Attended	Meetings
Rob McWilliam (Chair)		5	5
Claire Bassett		3	5
Vikas Shah		5	5
Paul Loft	Until December 2024	1	1
Simon Millhouse	From March 2025	3	3

The Committee met five times in 2024-25 on: 10 December 2024; 14 February 2025 (focused meeting on the draft annual accounts and external audit progress); 25 March 2025; 5 June 2025; and 4 September 2025.

The Committee has confirmed to the Board that it has carried out its responsibilities in line with its terms of reference.

Statement of corporate governance arrangements

We are not required to adopt the UK Corporate Governance Code. However, the SRA Governance Handbook requires that Board members should at all times have regard to their obligations as directors of the SRA under relevant legislation, the Articles of Association and the principles of the UK Corporate Governance Code.

Engagement with employees

As referenced within the section 172 statement in the strategic report, the staff forum and trade union represent an opportunity for employees to have their voices heard in a formal setting. We also engage with employees through consultation on significant issues such as changes to working arrangements - for example, hybrid working.

Employment of disabled people

As an organisation, we expect the law firms we regulate to create and champion an equal and diverse culture, and we do the same. We expect our staff to consider EDI throughout their work, whatever their role. Our staff networks support the promotion of equal opportunities in terms of policies, procedures, practices, recruitment and career development for employees to ensure disabled employees are treated equally. We also offer a portfolio of training to develop our staff in a fair and non-discriminatory manner. We are a disability confident level 2 employer, which enables us to make the most of the opportunities provided by employing disabled people. We have a specific staff network to support staff with disability and improving mental health wellbeing.

Supplier payments

It is our policy to ensure all suppliers, when entering into contractual relationships with us, are aware of our payment terms of 30 days from the date of invoice once goods or services have been delivered. We are pleased to report that we consistently make payments in line with this policy, demonstrating our commitment to prompt supplier compensation.

We have successfully achieved significant improvements in payment timeliness, reaching our goal of ensuring the vast majority of payments are processed within the agreed-upon terms. We have no business or working capital need to delay payments to suppliers and no suppliers have complained to us over the timing of our payments to them.

We are proud to confirm that, during the last financial year, we took fewer than 30 days on average to pay our suppliers, as measured from the date of receipt of the invoice, fully meeting our target metric.

Environmental report

We appointed Carbon Footprint Ltd, a leading carbon and energy management company, to independently assess our greenhouse gas (GHG) emissions in accordance with the UK Government's 'Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance'.

The GHG emissions have been assessed following the GHG Protocol and ISO 14064-1:2018 standard using the 2025 emission conversion factors published by Department for Energy Security and Net Zero. The assessment follows the dual reporting approach covering location-based and market-based reporting for assessing Scope 2 emissions from electricity usage. The financial control approach has been used.

The table below summarises the GHG emissions for the financial year. Comparing the reporting year to the previous year we reduced our total energy consumption by 32,427 kWh (8%). Comparing the reporting year to the baseline year we reduced our total energy consumption by 167,999 kWh (31%). We continued to encourage staff to use public transport where possible when travelling for business. This reduced our business travel carbon output by 7 tonnes (27%). Comparing the reporting year to the baseline year we reduced our total business travel carbon output by 22.4 tonnes (46%). The results in the table below demonstrate our commitment to reducing our overall emissions by 50% by 2030 and achieving net zero by 2050.

		Location-based tCO2e
Scope	Emission Source	2021/22 (Baseline Year)	2024/25	2023/24
1	Natural Gas	-	1.9	3.2
		-	1.9	3.2
2	Electricity	89.0	54.3	54.2
		89.0	54.3	54.2
3.6	Grey Fleet (employee-owned vehicles)	40.5	26.3	33.3
		40.5	26.3	33.3
All	Total tCO₂e	129.5	82.5	90.7
Total tCO₂e per employee (FTE)	0.2	0.1	0.1
Total tCO₂e per £M Turnover	1.7	0.7	0.7
SECR	Total energy consumption (kWh)*	549,767	381,768	414,195

* Streamlined Energy and Carbon Reporting (SECR) Mandatory elements only (scope 1, scope 2, scope 3 grey fleet).

The table below presents the year-on-year comparison. This shows that we have achieved a material reduction in carbon emissions through our reduction in office space.

Activity	Baseline Year (2021/22)	Current year (2024/25)	Previous Year (2023/24)	% Change from previous year	% Change from baseline year
Total energy consumed (kWh)	549,767	381,768	414,195	-8%	-31%
Total Gross Location-based Emissions - SECR elements only (tCO2e)	129.53	82.52	90.67	-9%	-36%
Intensity ratio: tCO2e (gross SECR mandatory elements only, location-based) per £M revenue	1.69	0.57	0.7	-19%	-66%
Intensity ratio: tCO2e (gross SECR mandatory elements only, location-based) per employee	0.21	0.09	0.11	-18%	-57%

The directors are responsible for preparing the Solicitors Regulation Authority Limited group annual report and financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors must have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law).

Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently
• state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements
• make judgments and estimates that are reasonable and prudent
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.

Financial statements are published on the company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' confirmations

In the case of each director in office at the date the Directors' Report is approved:

• so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and
• they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.

This Directors' Report was approved by order of the Board on 21 April 2026.

Signed by:

Anna Bradley
Chair

28 April 2026

Report on the audit of the financial statements

Opinion

In our opinion:

• the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 October 2025 and of the Group's deficit and the Parent Company's deficit and the Group's cash flows for the year then ended;
• the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Solicitors Regulation Authority ('the Parent Company') and its subsidiaries ('the Group') for the year ended 31 October 2025 which comprise of the following:

Group	Parent Company
Consolidated Income and Expenditure Statement	Company Income and Expenditure Statement
Consolidated Statement of Comprehensive Income	Company Statement of Comprehensive Income
Consolidated Balance Sheet	Company Balance Sheet
Consolidated Statement of Changes in Equity	Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes 1 to 25 to the financial statements including a summary of significant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group or Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group and the Parent Company's ability to continue as a going concern.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Strategic Report and Directors' Report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Other Companies Act 2006 reporting

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Parent Company and management.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Company/Group and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining an understanding of the Company's/Group's policies and procedures regarding compliance with laws and regulations;

we considered the significant laws and regulations to be Companies Act 2006, FRS 102 the applicable accounting framework and UK tax legislation.

The Company/Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be data protection and health and safety legislation.

Our procedures in respect of the above included:

• Enquires of management whether there were any litigations and claims;
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of correspondences with regulatory and tax authorities for any instances of non-compliance with laws and regulations; and
• Review of financial statement disclosures and agreeing to supporting documentation.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Company's/Group's policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

Based on our risk assessment, we considered the areas most susceptible to fraud to be posting inappropriate journal entries to manipulate financial results, bias in management estimates and manipulation of practicing fee income cut-off.

Our procedures in respect of the above included:

• Testing a sample of journal entries throughout the year, which met defined risk criteria, by agreeing to supporting documentation;
• Assessing significant estimates made by management for bias including the cost allocation methodology used to calculate the recharge of costs to SRA Compensation fund, the valuation and assumptions used in the calculation of significant provisions which included the interventions, disciplinary proceedings and litigation provision, the Solicitors Indemnity Fund claims provision and the bad debt provision for trade debtors including cost recoveries;
• Data analytics procedures to extract the 2025/26 PC Fee income from the CRM system, assess accuracy of recorded income to receipts, recalculate fee deferrals and reconcile to deferred income included in the financial statements; and
• A review of unadjusted audit differences for indications of bias or deliberate misstatement.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Samantha Lifford (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor

Birmingham​, UK

Date:

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

			Restated
	Note	2025 £'000	2024 £'000
Income	4	144,340	129,637
Operating expenses		(149,668)	(126,872)
Operating (deficit) / surplus for the year	5	(5,328)	2,765
Interest and dividends receivable	7	3,209	2,501
Realised gain on disposal of investments	10	866	-
(Deficit) / surplus before taxation		(1,253)	5,266
Taxation charge	8	(639)	(683)
(Deficit) / surplus for the financial year		(1,892)	4,583

All operations are continuing.

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
(Deficit) / surplus for the financial year		(1,892)	4,583
Unrealised gain on investments	10	3,099	3,928
Taxation in respect of unrealised gain on investments	8	(596)	-
Total comprehensive income		611	8,511

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
Fixed assets
Tangible assets	9	1,319	1,619
Investments	10	46,495	39,083
		47,814	40,702
Current assets
Debtors	11	29,379	36,089
Investments	10	1,269	7,394
Cash		139,412	110,189
		170,060	153,672
Creditors: amounts falling due within one year	12	(144,546)	(122,392)
Net current assets		25,514	31,280
Total assets less current liabilities		73,328	71,982
Creditors: amounts falling due after one year	12	(1)	(34)
Provision for other liabilities	14	(26,390)	(25,622)
Net assets		46,937	46,326
Capital and reserves
Capital contribution		13,337	13,337
Accumulated funds		33,600	32,989
Total	21	46,937	46,326

Approved and authorised for issue by the Board of Directors on 21 April 2026

and signed 28 April 2026 on its behalf by:

Anna Bradley
Chair
Solicitors Regulation Authority Limited

Registered no. 12608059

The notes on pages 52 to 78 form part of these financial statements.

	Note	Capital Contribution £'000	Retained earnings £'000	Total equity £'000
Balance as at 31 October 2023		13,337	24,478	37,815
Total comprehensive income for the year as previously stated		-	6,229	6,229
Prior period adjustment	25	-	2,282	2,282
Balance as at 31 October 2024 restated	21	13,337	32,989	46,326

	Note	Capital Contribution £'000	Retained earnings £'000	Total equity £'000
Balance as at 31 October 2024 restated		13,337	32,989	46,326
Total comprehensive income for the year		-	611	611
Balance as at 31 October 2025	21	13,337	33,600	46,937

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
Income	4	145,024	130,429
Operating expenses		(150,817)	(123,743)
Operating (deficit) / surplus for the financial year	5	(5,793)	6,686
Interest and dividends receivable	7	2,548	1,918
Realised gain on disposal of investments	10	32	-
(Deficit) / surplus before taxation		(3,213)	8,604
Taxation charge	8	(639)	(683)
(Deficit) / surplus for the financial year		(3,852)	7,921

All operations are continuing.

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
(Deficit) / surplus for the financial year		(3,852)	7,921
Unrealised gain on investments	10	1,152	456
Taxation in respect of unrealised gain on investments	8	(269)	-
Total comprehensive (loss) / income		(2,969)	8,377

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
Fixed assets
Tangible fixed assets	9	1,319	1,619
Investments	10	15,270	9,870
		16,589	11,489
Current assets
Debtors	11	28,792	36,601
Investments	10	-	5,906
Cash		139,074	109,204
		167,866	151,711
Creditors: amounts falling due within one year	12	(144,219)	(122,301)
Net current assets		23,647	29,410
Total assets less current liabilities		40,236	40,899
Creditors: amounts falling due after one year	12	(1)	(34)
Provision for other liabilities	14	(16,973)	(14,634)
Net assets		23,262	26,231
Capital and reserves
Capital contribution		13,337	13,337
Accumulated funds		9,925	12,894
Total		23,262	26,231

Approved and authorised for issue by the Board of Directors on 21 April 2026

and signed 28 April 2026 on its behalf by:

Anna Bradley
Chair, Solicitors Regulation Authority Limited

Registered no. 12608059

The notes on pages 52 to 78 form part of these financial statements.

		Capital Contribution	Retained earnings	Total equity
	Note	£'000	£'000	£'000
Balance as at 31 October 2023		13,337	4,517	17,854
Total comprehensive income for the year as previously stated		-	6,095	6,095
Prior period adjustment	25	-	2,282	2,282
Balance as at 31 October 2024 restated		13,337	12,894	26,231

		Capital Contribution	Retained earnings	Total equity
	Note	£'000	£'000	£'000
Balance as at 31 October 2024 restated		13,337	12,894	26,231
Total comprehensive loss for the year		-	(2,969)	(2,969)
Balance as at 31 October 2025	21	13,337	9,925	23,262

The notes on pages 52 to 78 form part of these financial statements.

			Restated
	Note	2025 £'000	2024 £'000
Cash flow from operating activities	16	24,872	24,625
Taxation paid		(991)	(323)
Net cash generated from operating activities		23,881	24,302
Cash flow from investing activities
Interest and dividends	7	2,272	1,759
Cash (invested) in / withdrawn from fixed asset investments		(3,483)	484
Cash withdrawn from / (invested) in short term investments		6,906	(5,900)
Purchase of fixed assets	9	(288)	(903)
Net cash generated from / (used in) investing activities		5,407	(4,560)
Cash flow from financing activities
Finance lease payments	17	(65)	(158)
Net cash used in financing activities		(65)	(158)
Net increase in cash and cash equivalents		29,223	19,584
Cash and cash equivalents at the beginning of the year		110,189	90,605
Cash and cash equivalents at the end of the year		139,412	110,189
Cash and cash equivalents consist of:
Cash at bank and in hand	17	139,412	110,189

The notes on pages 52 to 78 form part of these financial statements.

1. Statement of compliance

The financial statements of Solicitors Regulation Authority Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland' ('FRS 102') and the Companies Act 2006. Solicitors Regulation Authority Limited (SRA) is a public benefit entity and these consolidated financial statements are those of a public benefit entity group. As the regulator of solicitors and law firms in England and Wales, the SRA works to protect the public.

2. Summary of significant accounting policies

a) Basis of preparation

The financial statements are prepared on a going concern basis, under the historical cost convention with the exception of the valuation of investments. The most significant accounting policies adopted by the Group are described below and these have been applied consistently, unless otherwise stated.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

SRA was incorporated on 18 May 2020 and began operating on 1 June 2021.

The Board of the SRA has concluded that the SRA is a public benefit entity as defined in FRS 102. This conclusion was reached after considering the regulatory objectives as outlined in section 1 of the Legal Services Act 2007.

The financial statements are presented in Sterling and all values are rounded to the nearest thousand (£'000), except when otherwise indicated.

b) Going concern

The financial statements have been prepared on a going concern basis.

The Executive and the Board continue to closely monitor all aspects of the Group's activities and financial performance. Sensitivity analysis relating to potential reductions in practising fee income has been carried out. The liquidity of investments has also been considered to ensure that funds are sufficiently accessible should they be called upon.

Given the strength of the consolidated balance sheet and availability and liquidity of investments and the relative certainty of income, the Board believes that, while uncertainty exists, this does not pose a material uncertainty that would cast doubt on the Group's ability to continue as a going concern. The Board, therefore, considers it appropriate for the consolidated accounts to be prepared on a going concern basis.

The reserves of the group include the reserves of the SRA and the SIF. The reserves of SRA can only be used for the activity of the SRA and the reserves of SIF can only be used for the activity of SIF. Reserves cannot be used to cross-subsidise either entity. The Board has taken this into consideration when assessing the basis on which the group financial statements are prepared. The going concern status of SRA and SIF are therefore considered separately, taking into account the specific circumstances that affect this in each case, including expected expenditure and the certainty around that, and the availability and certainty of income in each case.

c) Basis of consolidation

Consolidated financial statements have been prepared which comprise the results of Solicitors Regulation Authority Limited (SRA) and its subsidiaries, Solicitors Indemnity Fund Limited (SIFL) and the Solicitors Indemnity Fund (SIF) from 1 October 2023.

SIF has been consolidated as a subsidiary entity of SRA, in line with section 9 of FRS 102. Since 1 October 2023 SRA took responsibility for the management and administration of SIF. SIF is also governed by the SRA Indemnity Rules and it is these rules that give SRA the power to manage and administer the fund. This includes the power to govern the financial and operating policies of SIF through its day-to-day management and through the Indemnity Rules. In line with FRS102 sections 9.4 and 9.5 the Board considers SIF to be within the control of and a subsidiary of SRA.

Individual financial statements are also produced for SIF.

SIFL has been consolidated as a subsidiary of SRA. Since 1 October 2023, SRA controlled SIFL and was able to appoint the directors of the Company. In line with section 9.4 and 9.5 of FRS102 the Board considered SIFL to be within the control of and a subsidiary of SRA. SIFL ceased trading in 2024 and was dissolved on 25 February 2025.

d) Special purpose entity (SIF)

SIF is considered a special purpose entity in line with section 9.10 and 9.11 of FRS 102. SIF is consolidated within these financial statements. The operations, financing and use of SIF are distinctly separate from SRA with legal frameworks in place that require that separation to be maintained, however, the SRA has control over the day-to-day operations and also the rules that govern the use of SIF.

The fund was created by TLS in 1987 for the purposes set out in section 37 of the Solicitors Act 1974 (to provide compulsory professional indemnity cover to all solicitors).

SIF, therefore, has a specific legal purpose, which was initially to provide indemnity in respect of the practices of solicitors, recognised bodies and registered foreign lawyers carried on wholly or in part in England and Wales. This continued until 31 August 2000 when this function was replaced by the requirement for law firms to purchase indemnity insurance in the open market. From 1 September 2007, the fund began to provide cover for claims and the associated liabilities arising from firms insured in the open market which have ceased without successor subsequent to 1

September 2000 and where the requisite six-year run-off period has elapsed. SIF continues to perform this function and continues to operate for this purpose.

There is a strict separation between the assets and liabilities of SIF and those of the SRA. The funds of SIF can only be used for the activity of SIF and are not available to fund the wider activity of the SRA. It also has separate funding from the SRA as the income of SRA cannot be used to fund the activity of SIF. Were SIF to require additional funding this would require a separate levy to be collected for this purpose. In the event that either the SRA or SIF were to become insolvent the income of one could not be used to fund any shortfall in the other.

Some of the assets and liabilities of SIF are held in the name of SRA for the benefit of SIF. This includes the investments of SIF which are held by the SRA but in the name of SIF. These assets are held on behalf of SIF and, as no economic benefit can flow to SRA due to the legal restrictions on the fund, are not considered to be assets of SRA. In addition, liabilities resulting from SIF activities are in the name of SRA, but settled from SIF's cash balances. As such, whilst the technical obligation may fall on SRA on SIF's behalf, no outflow of economic benefit occurs from these entities. This arrangement is analogous to an agency arrangement in practice. As a result, the assets and liabilities relating to SIF's legal purpose are included within the balance sheet of SIF and not within the balance sheet of the SRA. This is consistent with how SIF's financial statements have been prepared in previous years.

As and when the SRA no longer considers it necessary or appropriate that the Fund is required for providing indemnity in any way the Fund would be released to the Law Society for the overall benefit of the solicitors' profession. Further detail on the treatment of SIF's assets and liabilities is included within note 10.

e) Non-consolidated entities

In the opinion of the Board the SRA Compensation Fund should not be consolidated into the financial statements as this entity is not considered to be a subsidiary, associate or joint venture as defined by FRS 102.

The results of the SRA Compensation Fund which is maintained and administered by the SRA under requirements set out in statute, are not included within these SRA financial statements as the Compensation Fund is considered to be held on 'Trust' purely for the specific purpose for which the Compensation Fund is created and the SRA does not have the right to access any of the Compensation Fund's assets for its own purposes and would not be liable to meet any liabilities created by the Compensation Fund if it were unable to meet them. As the SRA does not have control or significant influence and does not derive anything other than inconsequential indirect benefit, the financial results, assets and liabilities of the Compensation Fund are not included in the financial statements of the SRA. The financial statements of the Compensation Fund are available on the SRA website.

f) Ultimate parent undertaking

The company is limited by guarantee and the sole member is TLS. TLS was incorporated by Royal Charter. The company is included in the consolidated accounts of TLS.

g) Foreign currency

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling at the date of the transaction. All foreign exchange differences have been taken to the income statement during the year.

h) Income recognition policies

i. Practising fees collected to fund operating activities

Income in relation to practising fees is recognised on an accruals basis, apportioned over the period to which the practising certificate relates (1 November to 31 October, except where individuals join during the year). Income invoiced but not yet received prior to year-end is included in debtors and in deferred income to match with the period to which it relates. Practising fees collected by the SRA are only used to fund permitted activities under section 51 of the Legal Services Act 2007.

ii. Solicitors Qualifying Examination

The SQE is the assessment for all aspiring solicitors in England and Wales. The first examinations took place in November 2021. Income from SQE entries is recognised on an accruals basis ensuring income is recognised as services are delivered.

iii. Income from the SRA Compensation Fund

The SRA manages and administers the activity of the Compensation Fund on behalf of the Compensation Fund. The cost of this activity is recovered from the Compensation Fund. This income is recognised when actually calculated and notified to the Compensation Fund by the SRA on a monthly basis. The costs to be charged to the Compensation Fund are agreed by the Audit and Risk Committee. The amount recharged represents the work done directly on behalf of the fund as well as an agreed proportion of overhead costs allocated to the Compensation Fund.

iv. Other income

There are a number of other income streams. For each, income is recognised on an accruals basis ensuring that income is recognised as the services are delivered. The date of delivery is typically the invoice date.

There is one significant exception to this which is Periods of Recognised Training. Income in relation to Periods of Recognised Training is apportioned over the period to which the training is undertaken which is two years.

v. Investment income

Income from investments is recorded as interest income or capital gains or losses as realised. Changes in the value of the investment portfolio are included as unrealised gains within the statement of comprehensive income.

vi. Interest from indemnity claim recoveries

Interest from indemnity claim recoveries is recognised when it can be reliably measured and there is a reasonable expectation of recovery.

vii. Contributions to SIF

Contributions are accounted for on the accruals basis.

viii. Recoveries income

Income arising from the Solicitors Disciplinary Tribunal making a costs order following enforcement actionfor amounts payable to the SRA is recognised on an accruals basis at the point of the order is made. Recoveries are discounted to reflect the likely timeframe of recoveries and are recorded at the discounted amount in the income statement.

i) Employee benefits

Payments or other benefits arising from the termination of a person's employment are recognised as a liability and expensed when an individual is notified of the redundancy or termination.

The SRA makes contributions towards the defined contribution scheme up to a maximum of 12.25% of basic salary. The amount charged to the income and expenditure account in respect of pension costs and other post-retirement benefits is the contribution payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

j) SIF claims costs

Claims costs recognised each year comprise claims handling costs including the costs of panel solicitors, damages paid out, and other costs net of indemnity recoveries. Claims costs are accounted for when incurred and indemnity recoveries are recognised at the point they can be reliably measured and when there is a reasonable expectation of recovery.

k) Taxation

Taxation expense comprises current and deferred tax recognised in the reporting period. Tax is recognised in the income and expenditure statement, except to the extent that it relates to items recognised in other comprehensive income. In this case tax is recognised in the statement of comprehensive income.

l) Tangible assets

Depreciation is provided on a straight-line basis to write off the cost over the useful economic life of the assets as follows:

Asset	Useful Economic Life
Furniture and equipment	5 years straight line
Computers and hardware	3 years straight line
Computers and hardware (with 4-year warranty)	4 years straight line
Short leasehold property improvements	Over the period of the lease

Leasehold property improvements are capitalised where there is future economic benefit arising from the improvements. Assets under construction are not depreciated until the asset is completed. The cost of repairs and maintenance is expensed as incurred.

Tangible assets are assessed for indicators of impairment at each reporting end date. Assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated values have been affected. The impairment loss is recognised in the Statement of Comprehensive Income.

m) Leased Assets

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the SRA. All other leases are classified as operating leases.

Assets held under finance leases and hire purchase contracts are recognised initially at the lower of the fair value of the asset or the present value of the minimum payments at the inception of the contract. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Assets held under finance leases and hire purchase agreements are included in tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets. Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term. The benefits of lease incentives are recognised as a reduction to the rental expense over the lease term on a straight-line basis.

n) Valuation of investments

Fixed asset and current asset investments comprise managed investment funds and listed securities. Realised gains or losses represent the difference between net sale proceeds and purchase price. Investments are measured at fair value. Changes in fair value are recognised in other comprehensive income. The fair value of investments is obtained at the balance sheet date based on valuations normally using prices obtained from an independent pricing source.

Investments intended to be held on a continuing basis and for long term growth are recognised as fixed asset investments. Investments that may be required to fund ongoing activities within the next 12 months, or investments held on short term deposit over three months, are recognised as current asset investments.

o) SIF indemnity recoveries provisions

Indemnity recoveries are recognised at the point at which they can be measured and there is a reasonable expectation of recovery. In practise this means when SIF is notified of entitlement to amounts. Assessment is made of the likelihood of recovery and subsequent provision made if required. No provision is made for other potential future indemnity recoveries due to the uncertainty of whether any amounts can be recovered.

p) Interest from indemnity claim recoveries

Interest from indemnity claim recoveries is recognised when it can be reliably measured and there is a reasonable expectation of recovery.

q) Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents are defined as cash at bank and in hand, and short-term cash deposits defined as those maturing within three months of acquisition. The managed investment portfolios are not included in the definition of cash and cash equivalents as, while they can be liquidated without penalty with 24 hours' notice, there is a risk of a change in the value.

Investments that may be required to fund ongoing activities within the next 12 months, or funds held on short term deposit over three months, are recognised as current asset investments.

r) Provisions and contingencies

i. Provisions (note 14)

Provisions are recognised where there is a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. All provisions are made based on management's best estimate given past experience and available information.

We recognise provisions for the following items on the basis outlined below:

• Interventions, disciplinary proceedings and litigation - the unavoidable costs of completing proceedings in these areas based on earlier activity. Provisions are made when third party firms are instructed to carry out work following a decision to intervene into a law firm, take disciplinary action against a solicitor or firm, or defend litigation against the SRA.
• Dilapidations - the unavoidable costs of restoring leased property to the same state as when the property lease was taken on.
• Deferred tax is recognised on all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable surpluses. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.
• Claims provisions - estimation techniques are used to determine the gross claims provision which represents the estimated outstanding liabilities relating to all indemnity years. Ultimate claim settlements are estimated by the use of statistical projections of historical data, together with case by case reviews of notified losses, and are based on information available at the time the estimates are made. There is uncertainty as to the quantum of the ultimate settlement of the liabilities. This is inherent in the process of estimating such that, in the normal course of events, unforeseen or unexpected future developments could cause the ultimate cost of settling the outstanding liabilities to differ from the estimate. Any differences between provisions and subsequent settlements are dealt with in later accounting periods as actual costs and non-insurance recoveries become known. Claims provisions include the estimated future costs of panel solicitors and claims handling costs, including a proportion of overheads. Claims provisions are included at a discounted rate representing the present value of the amount expected to be required to settle the obligation.

ii. Contingencies

Contingent liabilities are not recognised but are disclosed. Contingent liabilities arise as a result of past events when (i) it is not probable that there will be an outflow of resources or the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the company's control.

Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when an inflow of economic benefits is probable.

s) Financial instruments

The SRA has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument.

i. Financial Assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are measured at transaction price including transaction costs.

Financial assets, other than those held at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

ii. Financial liabilities

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less.

Trade payables are recognised initially at transaction price and subsequently measured at amortised cost.

t) Related party transactions

Transactions with directors and key management are disclosed in note 6. Transactions with the Compensation Fund, TLS and any other related parties are disclosed in note 22.

u) Reserves

Reserves of the company comprise a capital contribution from TLS upon the transfer of activities from TLS to Solicitors Regulation Authority Limited in 2021 and accumulated surpluses made within SRA. Practising fees collected by the SRA and consequently any resulting surpluses made can only be used for purposes permitted by Section 51 of the Legal Services Act 2007. Reserves are not distributable outside of the company other than if the company were to be wound up.

The reserves of the Group related to the activity of SIF can only be used for activity related to SIF and cannot be used to fund the activity of SRA.

v) Fixed asset investment in subsidiaries

Fixed asset investments in subsidiaries are accounted for at cost less any impairment.

3. Critical accounting judgements and key sources of estimation uncertainty

To be able to prepare the financial statements in accordance with United Kingdom accounting standards, management must make estimates and assumptions that affect the recorded assets and liabilities. These estimates are based on historical experience and various other assumptions that management believe are reasonable.

The result of these form the basis for making judgements about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions however they are based on management's best estimate and all available information and after consideration of the sensitivity of key assumptions. The following accounting policies include significant judgments and key sources of estimation:

i. Consolidation of the Solicitors Indemnity Fund and treatment as a special purpose entity

On 1 October 2023 the SRA took responsibility for the management and administration of the Solicitors Indemnity Fund (SIF). SIF has been included within these consolidated financial statements (see note 2 c and 2 d)

SIF is treated as a special purpose entity with the assets and liabilities held on its behalf by SRA not being recognised on the balance sheet of SRA. Further information is provided in note 2d and note 10.

ii. Recoveries

Costs incurred in protecting the public may be recoverable from solicitors. The SRA recognises debt arising from cost orders made by the Solicitors Disciplinary Tribunal at the point a formal decision is rendered. Under S.48(4) of the Solicitors Act 1974, these orders carry the weight of High Court orders and represent a present obligation from the counterparty to the SRA. This policy (amended from 2024/25) moves away from the historical cash-basis treatment to an accruals-based approach in accordance with FRS 102.

Debt is initially recorded at the value specified in the SDT cost order except where it is known at the outset that there is no reasonable chance of recovery. Subsequent measurement includes the addition of statutory interest where chargeable. Debts are recognised at a discounted rate representing the present value of the amount expected to be recovered. This is based on an internal assessment of the likelihood of recovery and expected timing of recovery.

iii. Provisions

Provisions are recognised in respect of present obligations as a result of past events where it is probable that an outflow of resources will be required to settle the obligations and they can be reliably estimated. All provisions are made based on management's best estimate given past experience and available information.

We recognise provisions for the following items on the basis outlined below:

• Interventions, disciplinary proceedings and litigation - the SRA recognises provisions for the unavoidable costs of completing proceedings in these areas based on earlier activity. The cost of completing the works is based on estimates provided by the third party agents undertaking the works and agreed by SRA staff involved in the proceedings.
  Provisions are made when third party firms are instructed to carry out work following a decision to intervene into a law firm, take disciplinary action against a solicitor or firm, or defend litigation against the SRA.
• Dilapidations - the SRA recognises provisions for the unavoidable costs of restoring leased property to the same state as when the property lease was taken on. The costs represent the full cost of dilapidations at the end of the lease term. The estimate is based on previous works undertaken and settlements previously agreed.

• The ultimate liability arising from SIF claims - this provision consists of three components: case reserves, claims incurred but not reported (IBNR) and a claims handling costs provision.

  Case reserves are estimated on a case by case basis by claims handlers and, where deemed necessary and appropriate, further opinions are sought from third party solicitors. Indemnity claim recoveries reduce the cost of claims and are only recognised where there is a reasonable expectation of recovery. This is in practical terms when SIF is notified of entitlement to amounts and so subject to a lesser degree of uncertainty than case reserves.

  External actuaries estimate IBNR using standard actuarial claims projection techniques on a triennial basis or when deemed appropriate. The most recent projection was prepared in 2023 for the 31 October 2023 financial year end. Such methods extrapolate the development of paid and incurred claims, indemnity recoveries from third parties, average cost per claim and expected loss ratios. The main assumption underlying these techniques is that past claims development experience is used to project ultimate claims costs. To the extent that the ultimate cost is different from the estimate, where experience is better or worse than what was assumed, the surplus or deficit will be credited or charged through the Statement of Comprehensive Income in future years.

  Direct claims handling costs are recognised to the extent they can be separately identified as specifically relating to claims handling expected to be incurred due to known claims and IBNR cases.

4. Analysis of Income

		Restated		Restated
	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Practising fee income	72,132	68,101	72,132	68,101
Compensation Fund income	20,136	15,581	20,136	15,581
Education and training income	45,277	36,565	45,277	36,565
Other income	3,885	3,955	4,569	4,747
Recoveries income	2,882	5,303	2,882	5,303
Grants	28	132	28	132
Total Income	144,340	129,637	145,024	130,429

Operating (deficit) / surplus

Operating (deficit) / surplus is stated after charging:

		Restated		Restated
	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Impairment of trade receivables	3,689	3,253	3,689	3,253
Operating lease costs	1,274	930	1,274	930
Depreciation	579	663	579	663
Audit fees payable to the company's external auditors	281	271	198	175

Employees and directors

Employees (Group and company)

The average monthly number of full-time equivalent persons (including executive directors) employed by the Group and company during the reporting year was 874 (2024: 783).

Directors

The directors' emoluments were as follows:	2025 £'000	2024 £'000
Aggregate remuneration	280	282

The directors received no pension contributions in the year.

Highest paid director

The highest paid director's emoluments were as follows:

The directors' emoluments were as follows:	2025 £'000	2024 £'000
	2025	2024
	£'000	£'000
Total amount of emoluments	105	105

The directors received no other financial benefits or remuneration.

Key management remuneration

Key management includes the directors and members of senior management. There were five members of the senior management team during the year, including one temporary appointment following a period with only three, and four throughout the prior year. The remuneration paid to the senior management team in the reporting period is shown below:

	2025 £'000	2024 £'000
Salaries and other short-term benefits	1,096	1,121
Pension contributions	66	75
	1,162	1,196

Staff costs (Group and company)

	2025 £'000	2024 £'000
Wages and salaries	43,138	37,969
Social security costs	5,222	3,909
Other pension costs	3,692	3,286
Staff costs	52,052	45,164

7. Interest and dividends receivable

Interest and dividends are received within the managed investments and on cash and cash equivalent deposits.

	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Interest - fixed and current asset investments	1,284	398	1,015	135
Dividends - fixed and current asset investments	460	387	112	69
Interest - cash and cash equivalents	1,465	1,716	1,421	1,714
Interest and dividends	3,209	2,501	2,548	1,918

8. Taxation

The activities of the group are considered by the directors to be non-trading activities and therefore any surplus not subject to Corporation Tax. Tax is payable on interest received and capital gains on investments once realised.

Group

	2025 £'000	2024 £'000
Current tax liability	639	683
Total current tax charge	639	683
Total tax charge	639	683

Reconciliation of tax charge

		Restated
	2025 £'000	2024 £'000
(Deficit) / surplus before taxation	(1,253)	5,266
Tax at the standard rate of 25%	(313)	1,317
Amendments to tax
Expenses not deductible for tax purposes	37,023	30,909
Income not taxable for tax purposes	(35,996)	(31,728)
Chargeable gains	277	168
Bond movements	39	-
Difference in tax treatment of parent and subsidiary	(36)	-
Utilisation of prior year tax losses for which no deferred tax asset was recognised	(454)	(27)
Exempt distributions and adjustments in respect of prior periods	99	44
Tax charge for the year	639	683

All SIF brought forward tax losses have been utilised in the year (2024: £2,267k), and deductible timing differences are £nil (2024: £23k).

The deferred tax relating to items recognised in other comprehensive income is a charge of £269k (2024 - £nil).

Company

	2025	2024
Current tax liability	639	683
Total current tax charge	639	683
Total tax charge	639	683

Reconciliation of tax charge

		Restated
	2025 £'000	2024 £'000
(Deficit) / surplus before taxation	(3,213)	8,604
Tax at the standard rate of 25%	(803)	2,151
Amendments to tax
Expenses not deductible for tax purposes	37,023	30,909
Income not taxable for tax purposes	(35,996)	(32,589)
Chargeable gains	277	168
Bond movements	39	-
Exempt distributions and adjustments in respect of prior periods	99	44
Tax charge for the year	639	683

The deferred tax relating to items recognised in other comprehensive income is a charge of £269k (2024 - £nil).

9. Tangible assets (Group and company)

	Short leasehold property £'000	Furniture and equipment £'000	Computers and hardware £'000	Total £'000
At 31 October 2024	404	343	872	1,619
Additions	-	-	288	288
Disposals	-	-	(9)	(9)
Depreciation	(55)	(144)	(380)	(579)
Closing net book amount	349	199	771	1,319
At 31 October 2025
Cost	551	797	1,936	3,284
Accumulated depreciation and impairment	(202)	(598)	(1,165)	(1,965)
Net book amount	349	199	771	1,319

The net book value of assets held on finance lease is £34k (2024: £98k).

10. Investments

Fixed asset investments

Group

	2025 £'000	2024 £'000
At 1 November 2024 / 1 November 2023	39,083	34,517
Interest and dividends received	893	742
Management fees	(192)	(188)
Gain on disposal	866	659
Deposits / withdrawals	2,784	(484)
Unrealised gain on investments	3,061	3,837
At 31 October 2025	46,495	39,083

Group investments are approximately 53% equities, 27% bonds, 15% alternatives and 5% in cash (2024: 50% equities, 25% bonds, 6% alternatives and 19% in cash).

Company

	2025 £'000	2024 £'000
At 1 November 2024 / 1 November 2023	9,870	8,608
Interest and dividends received	276	204
Management fees	(60)	(63)
Gain on disposal	32	665
Deposits	4,000	-
Unrealised gain on investments	1,152	456
At 31 October 2025	15,270	9,870

Company investments are approximately 52% invested in listed equities, 27% in bonds, 17% in alternatives and 4% in cash assets (2024: 53% invested in listed equities, 27% in bonds, 15% in alternatives and 5% in cash assets).

Investment in subsidiary and special purpose entity

Name of the undertaking	Solicitors Indemnity Fund Limited	Solicitors Indemnity Fund
Type of undertaking	Company limited by guarantee (Company number 02143641)	Special purpose entity
Address of the registered office	The Cube, 199 Wharfside Street, Birmingham, England, B1 1RN	N/a
Principal place of business	England and Wales	England and Wales
Included in consolidation	Yes	Yes

SIFL

On 1 October 2023 the SRA took control of Solicitors Indemnity Fund Limited (SIFL). Since 1 October 2023, SRA controls SIFL and is able to appoint the directors of the Company. In line with FRS102 9.4 and 9.5 the Board considers SIFL to be within the control of and a subsidiary of SRA. SIFL ceased trading in 2024 and was dissolved on 25 February 2025.

SIF

On 1 October 2023 the SRA took over management of the Solicitors Indemnity Fund (SIF) and the results of SIF are consolidated in the group from this point. As there was no consideration paid for the assets of SIF, there is no value recognised in the balance sheet as an investment in SIF. SIF is a subsidiary of the SRA. SIF has been consolidated as a subsidiary entity of SRA.

In line with section 9 of FRS 102, SRA is determined to have control over SIF as it is responsible for managing and administering SIF as well as having the power to govern the operating policies of the entity.

The assets and liabilities of SIF are detailed in the table below in line with their legal form. While some of these assets and liabilities are held by SRA, all are considered to be beneficially held for SIF and therefore recorded in the financial statements of SIF and not in SRA.

SIF balance sheet £'000	SRA £'000	SIF £'000	Total £'000
Assets
Investments	32,494	-	32,494
Debtors	-	692	692
Cash	340	-	340
Total assets	32,834	692	33,526
Liabilities
Claims provisions	-	(9,417)	(9,417)
Creditors	-	(432)	(432)
Total liabilities	-	(9,849)	(9,849)
Net assets	32,834	(9,157)	23,677

Current asset investments

The group and company's current investments at the balance sheet date were as follows:

	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Equities	-	214	-	-
Bonds	-	6,452	-	5,906
Alternatives	-	291	-	-
Cash assets	1,269	437	-	-
	1,269	7,394	-	5,906

The total fair value remeasurement gain on current asset investments in the period was £38.4k (2024: £91.7k).

11. Debtors

		Restated		Restated
	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Trade debtors	21,095	29,081	21,095	29,081
Other debtors	1,479	1,690	787	732
Prepayments	2,631	2,202	2,631	2,202
Amounts due from Solicitors Indemnity Fund	-	-	105	1,470
Accrued income	4,174	3,116	4,174	3,116
	29,379	36,089	28,792	36,601

Trade debtors include £0.7m (2024: £0.6m) of debtors on payment plans which fall due in more than one year. Trade debtors are stated after provisions for impairment of £3.7m (2024 restated: £3.0m).

12. Creditors: amounts falling due within one year

	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Trade creditors	3,084	1,706	3,084	1,706
Amounts due to Law Society	27,987	30,667	27,987	30,667
Amounts due to the SRA Compensation Fund	19,843	10,390	19,843	10,390
Corporation Tax	680	683	353	683
Taxation and social security	1,369	1,046	1,369	1,046
Finance leases	33	65	33	65
Other creditors	608	1,359	608	1,359
Practising fee deferred income	82,273	68,284	82,273	68,284
Accruals and deferred income	8,669	8,192	8,669	8,101
	144,546	122,392	144,219	122,301

Creditors: amounts falling due after more than one year (Group and company)

	2025 £'000	2024 £'000
Finance leases	1	34
	1	34

The finance leases relate to laptop computers. Remaining lease terms vary from 2 months to 26 months. At the end of the leases the company has no option to purchase.

13. Loans and other borrowing (Group and company)

Finance leases

The future minimum finance lease payments are as follows:

	2025 £'000	2024 £'000
Not later than one year	33	65
Later than one year and not more than five years	1	34
Total gross payments	34	99
Less: finance charge	-	-
Carrying amount of liability	34	99

14. Provision for other liabilities

Group

	2024 £'000	New provisions £'000	Utilised £'000	Released £'000	2025 £'000
Interventions, disciplinary proceedings, and litigation	13,953	18,129	(15,497)	(590)	15,995
Dilapidations	681	28	-	-	709
Deferred tax	-	269	-	-	269
Claims provision - SIF	10,988	300	(300)	(1,571)	9,417
	25,622	18,726	(15,797)	(2,161)	26,390

Company

	2024 £'000	New provisions £'000	Utilised £'000	Released £'000	2025 £'000
Interventions, disciplinary proceedings, and litigation	13,953	18,129	(15,497)	(590)	15,995
Dilapidations	681	28	-	-	709
Deferred tax	-	269	-	-	269
	14,634	18,426	(15,497)	(590)	16,973

Claims provision

Gross claims reserve provisions are sensitive to changes in the complexity of the case and the potential outcome and therefore cost of damages changing. The settlement of reserves is dependent on the specific circumstances of the individual claim and can vary significantly case by case.

Incurred but not reported (IBNR) provisions represent an estimate of cases where the event that triggers a claim has already happened i.e. an act of negligence has occurred at some time in the past but is presently unknown to SIF because it has not been reported. When disclosed to SIF it would still be subject to any statutory limitation provisions applying. An actuarial projection is made of this provision periodically. The risk exposure of all IBNR claims reduces over time as cases reach their primary or statutory limitation period.

SIF has an obligation to receive, assess the merits of claims and determine appropriate settlements for meritorious claims. Claims handling costs are therefore recognised to the extent they can be separately identified as specifically relating to claims handling expected to be incurred due to known claims and IBNR cases. The provision for direct claims handling costs comprises those relating to gross claims reserves, and to IBNR. The claims handling provision includes the estimated future costs of panel solicitors and other costs, including a proportion of overheads.

As outlined above the figures include provisions for claims not yet received by SIF and the claims handling costs associated with such claims. This provision may therefore not be utilised for several years.

Interventions, disciplinary proceedings and litigation

The provision for interventions, disciplinary proceedings and litigation includes the costs of legal fees to complete ongoing matters at the year end. Costs in relation to interventions are recharged in full to the Compensation Fund when incurred. The majority of this provision is expected to be utilised across the 2025/26 financial year although some disciplinary cases can take several months to be heard at the Solicitors Disciplinary Tribunal and the provision may therefore not be utilised until 2026/27.

Dilapidations

The provision for dilapidations represents the unavoidable costs of restoring the leasehold properties to the same state as when the lease was taken by the SRA (or by TLS where subsequently transferred to the SRA). The costs represent the best available estimate of the costs of carrying out the required works or eliminating the obligation by way of a negotiated settlement. This provision is expected to be utilised at the end of the lease, which is expected to be no earlier than March 2027.

Deferred tax

Deferred tax is provided on unrealised gains within the investment portfolio, representing the tax that would be payable should the assets be sold at their reporting date at fair value.

The total in the statement of comprehensive income comprises deferred tax on unrealised gain within SRA. Tax on unrealised gains within SIF is recognised in the income and expenditure statement.

	Group 2025 £'000	Group 2024 £'000	Compan 2025 £'000	Company 2024 £'000
Capital gains timing differences	269	-	269	-
At 31 October 2025	269	-	269	-

15. Financial instruments

The carrying value of the group and company's financial assets and liabilities measured at fair value through profit and loss are summarised by category below.

	Note	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Fixed asset investments	10	46,495	39,083	15,270	9,870
Current asset investments	10	1,269	7,394	-	5,906
		47,764	46,477	15,270	15,776

The group and company's income, expense, gains and losses in respect of financial instruments are summarised below.

	Note	Group 2025 £'000	Group 2024 £'000	Company 2025 £'000	Company 2024 £'000
Interest: Fixed asset investments		433	398	165	135
Dividends: Fixed asset investments	7	460	387	112	69
		893	785	277	204

16. Notes to the consolidated statement of cash flows

		Restated
	2025 £'000	2024 £'000
(Deficit) / surplus for the financial year	(1,892)	4,583
Net interest and dividends	(3,209)	(2,501)
Capital gain on investments	(866)	(659)
Fees on managed investments	191	188
Taxation charge for the year	639	683
Depreciation of fixed assets	579	663
Loss on disposal of fixed assets	9	-
Increase in provisions	499	2,932
Working capital movements
Decrease in debtors	6,711	8,528
Increase in creditors	22,211	10,208
Cash flow from operating activities	24,872	24,625

17. Analysis of changes in net debt

	1 November 2024 £'000	Cash flow £000	Other non-cash changes £000	31 October 2025 £'000
Cash and cash equivalents	110,189	29,223	-	139,412
Finance leases	(99)	65	-	(34)
	110,090	29,288	-	139,378

18. Litigation

Legal matters will arise as a matter of course due to the nature of operations, as solicitors may challenge decisions on action taken against them or their firms. The SRA has a robust process of reviewing and managing high profile litigation matters. Provisions and accruals are made in the financial statements to reflect litigation costs as appropriate. The Board does not consider there to be any litigation legal claims that require provision or disclosure.

19. Contingent assets and liabilities

There are a number of assets over which the SRA has some title or claim which may lead to potential future recoveries. These potential assets are not recognised as part of the provisions for recoveries as, in the opinion of the Board, they are so uncertain that they cannot be practically measured and hence no estimate is included here.

20. Capital and other commitments (Group and company)

At 31 October 2025 the company and group had no capital commitments. At 31 October 2025 the company had future minimum lease payments under non-cancellable operating leases as follows:

	2025 £'000	2024 £'000
Not later than one year	1,091	1,064
Later than one year and not more than five years	3,515	3,402
Later than five years	3,038	4,242
	7,644	8,708

The company had no other off-balance sheet arrangements.

21. Composition of total equity

Total equity of the group as at 31 October 2025 is made up as shown in the table below.

	£'000
At 31 October 2024 restated	46,326
Total comprehensive income for the financial year	611
At 31 October 2025	46,937
SRA	23,262
SIF	23,675
Total	46,937

The reserves of SRA can only be used to fund the operations of SRA and the reserves of SIF can only be used to fund the operations of SIF, they are not transferable between SRA and SIF.

22. Related party transactions

TLS, SIF and the Compensation Fund are related parties of Solicitors Regulation Authority Limited. Related party transactions with the Compensation Fund in the year totalled £20.1m (2024: £15.6m) which represented income received in respect of administration of the Compensation Fund. Additionally, the SRA collects contributions on behalf of the Compensation Fund annually.

Transactions with TLS are practising fee income collected on behalf of TLS and payments in respect of some shared services and contractual arrangements. These transactions totalled £69.0m and £0.6m respectively in the financial year (2024: £60.6m and £0.5m respectively).

The SRA charged SIF £90k (2024: £90k) for its management services in the financial year.

Note 6 provides for disclosure of the directors' remuneration and key management remuneration. Solicitor members of the Board (or their employers on their behalf) are required to pay an annual practising certificate fee, which is charged on the same basis as other practising solicitors. During the year these members (or firms of solicitors in which they may hold a position of influence) may be required to pay fees for regulatory services. These fees are charged on the same basis as other regulated individuals or firms. Due to the nature of the SRA's activities, such transactions with individuals and firms have not been disclosed.

23. Controlling parties

The ultimate controlling party is TLS. TLS is a body incorporated by Royal Charter. The consolidated financial statements of TLS group are available on TLS website (lawsociety.org.uk). TLS's address is The Law Society's Hall, 113 Chancery Lane, London, WC2A 1PL.

24. Post balance sheet events

There are no significant post balance sheet events requiring adjustment or disclosure.

25. Prior period adjustment

In prior years, cost awards by the Solicitors Disciplinary Tribunal were not accounted for on an accruals basis, in the manner set out in the accounting policy note 2h on income recognition. This error has been corrected in these financial statements, with an adjustment being made to the 2023/24 comparative financial information.

Group

	Income	Operating expenses	Debtors	Accumulated funds
	£'000	£000	£000	£'000
As previously reported	124,334	(123,851)	33,807	44,044
Adjustments
Legal debt cost recoveries	3,914	(1,632)	2,282	2,282
Recoveries income reclassification	1,389	(1,389)	-	-
As adjusted	129,637	(126,872)	36,089	46,326

Company

	Income	Operating expenses	Debtors	Accumulated funds
	£'000	£000	£000	£'000
As previously reported	125,126	(120,722)	34,319	23,949
Adjustments
Legal debt cost recoveries	3,914	(1,632)	2,282	2,282
Recoveries income reclassification	1,389	(1,389)	-	-
As adjusted	130,429	(123,743)	36,601	26,231

The above adjustment impacted the accumulated funds at 31 October 2024. In addition to this adjustment, two reclassifications have been made to the 2023/24 comparative financial information that do not affect the accumulated funds figure previously reported.

Costs recoverable following SDT awards that were received during 2023/24 of £1,389k were reported within the financial statements as a credit within operating expenditure. In these financial statements they are reported as income. The reported amounts for income and operating expenditure in 2023/24 are therefore £1,389k greater than previously reported.

The total increase in reported income for 2023/24, representing the sum of the two noted items is £5,303k (note 4). The total increase in reported operating expenditure for 2023/24, representing the sum of the two noted items is £3,021k.

Download: 2024-25 Annual report and accounts (PDF  pages, 4KB)