As an approved regulator and licensing authority for probate services, ICAEW carries out a wide range of activities to regulate and support its accredited firms and meet the objectives of the Legal Services Act.
To ensure it can continue to deliver these activities, the ICAEW Regulatory Board (IRB) carries out an annual review of its probate registration fee scale and sets out the budget for the coming year.
Before submitting its proposals to the Legal Services Board (LSB), ICAEW consults with its firms about the planned budget and fee level, and gathers views about the wider implications of these on firms, clients and wider access to probate services.
“This is one of a number of channels, including quality assurance reviews and registration renewals, where firm representatives can share their thoughts with us,” explains Matthew Downton, Director PSD Finance, Projects and Operations at ICAEW.
“We carefully analyse and consider all feedback from consultations and these other channels,” he says. “The consultation comments, in particular, often contain useful insights.”
“Senior management from ICAEW’s Professional Standards Department review and analyse the findings, and act on many of the ideas in the comments section each year.”
Planned operational programme
The LSB supports its goal of reshaping legal services to better meet society’s needs through three strategic themes: fairer outcomes, stronger confidence and better services.
Within these themes, there are more specific areas of focus, for example, ensuring equality and diversity, fostering innovation, promoting strong professional ethics and empowering consumers.
“The LSB’s themes are underpinned by measured activities related to operational delivery and effective organisational performance,” explains Matthew.
“Our planned operational programme at ICAEW is guided by these themes and activities to support the LSB’s overall goals.”
To continue to deliver that programme, ICAEW is proposing to raise 2024 probate registration fees by 5%.
“Recognising the challenge, in particular faced by smaller firms, this is lower than the 7% increase in 2023 and lower than the 2023 inflation rate,” says Matthew.
“Operational costs have mainly increased due to wage inflation,” he explains. “Our policy and governance team, in particular, are exceptionally busy meeting expectations related to administrative processes, consultations and information returns.”
Out to consultation
The fees consultation took place between June and August 2023. Firms were asked whether they agreed with the proposed fee increase and how this might affect them and their clients. They also answered questions on whether they agreed with the budget plans, and what else ICAEW can do to support them.
Although ICAEW extensively promoted the consultation, the number of firms responding was small (just 14, or 4% of ICAEW probate accredited firms).
“To put the findings into context, this means that in terms of the proposed budget and fee increase, 96% of firms were silent,” says Matthew.
“The majority of firms renew their licences annually and we do not hear many adverse comments about the levels of fees at that time,” he says, “which could be considered as agreement from the majority.”
Of the 14 consultation responses, 57% agreed with ICAEW’s proposed budget for 2024, and 43% agreed with the 5% fee increase.
Respondents who supported the level of fee rise largely accepted that inflationary pressures were affecting everyone, with some noting that the increase was below current inflation rates and was therefore reasonable.
Those that did not support the increase raised a range of issues. These included fees being prohibitive for small practices and fees being expensive compared to the level of income they were generating from this service line.
Other respondents (4) said probate was such a small part of their business, they were already questioning whether it was worth continuing with the service line.
Access to services
When consultees were asked whether they or their clients were “adversely impacted by the fees in such a way that affects access to probate services, either due to the level of the fees, a protected characteristic under the Equality Act 2010 (such as age, disability or race) or due to individual practising arrangements”, 64% said yes.
However, none of the respondents saying yes specifically mentioned protected characteristics in their comments indicating it should be split into two questions next year. Instead, again, some firms mentioned that fee levels made it difficult for small practices to make the service line profitable.
There were several references to the fee structure. Suggestions for change included:
- basing the fees on the number of authorised individuals, rather than the number of offices and number of principals in a regulated firm; and
- having fee levels that depend on the scale of activity and total fee income.
“Simplifying the fee structure is certainly something we’re open to looking at in future,” says Matthew.
Future planning
Most respondents said no when asked whether there were further activities they’d like to see included in future business planning and budgets, in particular related to equality, diversity and inclusion.
No one referred to equality diversity and inclusion specifically, but broader suggestions from those that said yes included: doing more at the national level to explain to the public that accountants can be authorised/licenced to carry out probate work; better training, thought leadership and knowledge transfer; and simplifying the paperwork.
The final question in the consultation asked whether the business plan will assist in providing better access to legal services by the consumer, and what further steps ICAEW should be taking to assist firms in meeting this objective.
Responses were again mixed. Just over a third either didn’t answer or said they didn’t know. Of the rest, there was a fairly even split between those saying yes and no, and one respondent suggested that while the plan would not improve access, it would help provide a better, more compliant service.
The main concerns raised were that the public is still unaware that accountancy firms offer probate services, and that if smaller local practices abandon probate there will be less competition in the market.
Respondents’ suggestions for further steps ICAEW, as a regulator, could take, included doing more to explain the options to the consumer, and providing more probate-specific resources, supported by the latest technology.
“This point about public awareness and consumer options has appeared over a number of years,” notes Matthew. “As the regulatory arm of ICAEW, we will continue to support the Legal Choices website. We are also discussing what ICAEW as a membership body can do to raise awareness.”
“In terms of resources, we will be looking at what progress can be made in these areas with our industry partners,” he adds. “Some of the existing resources, including helplines provided by ICAEW and its partners, are listed in the resources section below.”
Next steps
“We’ve received some really useful thoughts and contributions in this year’s consultation,” emphasises Matthew. “And we will most certainly be considering these in the coming 12 months and in discussions during the review for 2025’s fees.
ICAEW is currently submitting the final proposals for 2024 for approval by the LSB under its Practising Fee Rules.
This involves a detailed application process including sharing the strategy and priorities, budget and details of any fee changes.
In November, the full probate registration fee scale will be published at icaew.com/regulatoryfees, and registration renewals will be sent by email to firms.
Resources
Tax:
A tax helpline is provided by Marsh Commercial as part of its PII offer through Member Rewards.
Members/affiliates can also join the small practitioner community (free, and not just limited to small) and access a tax helpline.
Probate specific questions:
For non-tax questions related to probate, the ICAEW Technical Advisory Helpline can assist.
01908 248 250 or via live chat from the web page with an expert.