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As an approved regulator and licensing authority for probate services, our activities are guided by and support the Legal Services Board's strategic themes: fairer outcomes, stronger confidence and better services, to strengthen trust and protect the public by enabling, evaluating and enforcing the highest standards in the profession.

Recognising inflationary pressures and to continue to deliver our ongoing programme of activity to fulfil these objectives and those of the Legal Services Act, we propose to increase probate registration fees by 5% for 2024.

Please review the information below including the 2023 budget, business plan and the 2024 fee scale which sets out the impact of the change.

This consultation ran from 16 June to 11 August 2023.

How we set the probate registration fees

The review of probate registration fees begins in June each year. The strategic and operational priorities are discussed with the ICAEW Regulatory Board and a business plan and budget to deliver these are developed.

ICAEW operates a self-financing principle (also known as the ‘user pays approach’), which ensures all probate registration income is used for probate specific ‘permitted purposes’. Permitted purposes are prescribed regulatory activities as listed in Rule 6 of the Legal Services Board’s Practising Fee Rules.

The detailed budget estimates and analyses costs to deliver the plan including for example, staff, insurance, legal, project, office and overhead costs, and contributions required to fund other activities such as the Legal Services Board and Legal Choices website. The total cost of operations is then compared to our registered population of firms to ensure that income then matches expected expenditure.

The proposed new levels of registration fees are agreed by the ICAEW Regulatory Board.

We consult with probate registered firm representatives for feedback on the proposed fee increase and level. The fees are adjusted as appropriate in response to feedback received.
The fee increase proposal must then be approved by the Legal Services Board under its Practising Fee Rules. This involves a detailed application process including sharing the strategy and priorities, budget and details of any fee changes. This application is published by the Legal Services Board.

In November the full probate registration fee scale is published at icaew.com/regulatoryfees and registration renewals are then sent by email to firms.

We continue to carefully consider strategic, operational and oversight needs and associated funding and set the level of registration fees and levies as cost effectively as possible and on a year-to-year basis.

Fees may need to continue to rise in future years particularly considering inflation and the requirements placed on our organisation by the LSB. This will ensure that costs of regulatory operations, ‘permitted purposes’, are funded by an appropriate level of registration fees. We will, of course, consult about any such changes each year.

Annual firm levy

The annual levy funds the operation and building of a reserved legal services compensation scheme fund. The levy for 2024 is again unchanged.

Reserves

As part of its financial strategy, ICAEW holds reserves to provide financial strength, and as mitigation against unexpected events.

The level of probate reserves is specifically targeted as not to be too high or too low. The policy is therefore ‘reserves should be set at a level equivalent to between three and six months of expenditure through the income statement; and cash and investment balances should be at least sufficient to cover between three and six months of annual budgeted/forecast gross cash expenditure’.

Current reserves are in line with policy and therefore there is no requirement or element of 2023 fees which plans to draw on reserves or increase reserves.

Business plan and feedback to firms on 2023 activities

Building on the firm foundation of our work in previous years, our probate activities in 2023 have been busy and focused on the following key areas which the fees, and the 2023 increase has also helped facilitate:

Ensuring that the Professional Standards Department is best set up to deliver legal services regulation

  • Ensuring regulated firms deliver a good service and investigation of complaints.
  • Improvements in firms' transparency.
  • The 2023 Probate Diversity survey which will enable firms to benchmark themselves, understand the profile of their current teams and identify opportunities to reflect current and future client profiles.
  • Development of policy.
  • Support in terms of both resource and financial contribution in relation to Legal Choices website development and future plans.
  • Maintenance of the compensation scheme arrangements.
  • A new, more easy to understand disciplinary framework which will provide greater efficiency by improving the speed of investigations and disciplinary proceedings.
  • Consultations issued and responded to, for example a review of professional indemnity insurance arrangements.
  • Probate News, Regulatory and Conduct News and our LinkedIn channel keeps our firms and wider community informed.
  • ‘Future of reserved legal services regulation’ research.
  • Consumer research project planning.

Budget 2024

The budget for 2024 is targeted to self-finance and make a small surplus of £18k to return, over time, the start-up costs of becoming a regulator and licensing authority. Cost have largely increased due to inflation and salary increases, and also costs in relation to policy and governance have increased due to Legal Services Board requests for further administrative processes, consultations, and information returns.

£ including comp scheme

2024 Budget

Income: Registration fees

655,181

Income: Regulatory penalties

17,545

672,726

Income: Levy

104,366

Cost: Levy

(104,366)

0

Cost: Staff

(455,512)

Cost: Professional fees, Legal Choices and projects

(57,087)

Cost: Insurance (or scheme top up)

(99,782)

Cost: Committee and board

(36,333)

Cost: Travel

(2,000)

Cost: Design, surveys, consultations

(2,608)

Cost: Office

(1,200)

(654,522)

Surplus: Return in investment

18,204

Budgeted income is largely related to firm registration and licensing annual registration fees. All income is raised specifically for reserved legal services permitted purposes only. The levy income flows through the income statement to build the compensation scheme. Committee and board costs relate to the ICAEW Regulatory Board and the Probate Committee. Operational costs are in the main related to registration, regulatory, policy, quality assurance and conduct staff. Projects includes a contribution to fund the Legal Choices website.

£cost of operations analysis

2024 Budget

Staff

(455,512)

Committee

(36,333)

Comp scheme insurance / tfr

(99,782)

Projects incl. Legal Choices

(57,087)

Design and surveys

(2,608)

QAD review travel

(2,000)

Office

(1,200)

(654,522)

Activity

Regulatory, policy and engagement

32%

(209,447)

Registration and supervision

24%

(157,085)

Discipline and conduct

5%

(32,726)

Governance and insurance

22%

(143,995)

Education, research and projects

17%

(111,269)

The analysis above provides further details on expenditure analysed by cost type and by function. 

Also provided is an estimate of anticipated cost related to key activity types. As staff, committee and projects costs make up a significant proportion of the cost base, this is largely based on a ‘time spent’ basis.

Return on investment

£k

£k

Application and set-up costs

(170)

(170)

P&L surplus

2017

23

2018

15

2019

15

2020

17

2021

12

2022

14

2023 forecast

18

 

2024 budgeted

18

32

£18,204 is targeted as a surplus in 2024 as a contribution to return the start-up costs of becoming a regulator and licensing authority. It is estimated that the outstanding balance will be cleared in four years (December 2027).

The tables below compare the 2023 registration fees to the proposed 2024 registrations fees and show the impact of a 5% increase in each category.

2023 registration fees

Authorised firm

Principals

Offices

 

1

2 - 10

11+

Sole

401

699

1,227

2 - 5

699

1,227

2,155

6 - 9

1,227

2,155

3,781

10 - 50

2,155

3,781

6,635

51+

4,310

7,565

13,272

Licensed firm

Principals

Offices

1

2 - 10

11+

Sole

401

699

1,227

2 – 5

1,397

3,679

8,619

6 – 9

2,452

6,464

15,128

10 - 50

4,310

11,346

26,543

51+

8,619

22,693

53,087

2024 registration fees

Authorised firm

Principals

Offices

1

2 - 10

11+

Sole

414

734

1,288

2 - 5

734

1,288

2,263

6 - 9

1,288

2,263

3,970

10 - 50

2,263

3,970

6,967

51+

4,526

7,943

13,936

Licensed firm

Principals

Offices

1

2 - 10

11+

Sole

414

734

1,288

2 - 5

1,467

3,863

9,050

6 - 9

2,575

6,787

15,884

10 - 50

4,526

11,913

27,870

51+

9,050

23,828

55,741

2024: impact of 5% change

Authorised firm

Principals

Offices

1

2 - 10

11+

Sole

+20

+35

+61

2 - 5

+35

+61

+108

6 - 9

61

+108

+189

10 - 50

+108

+189

+332

51+

+216

+378

+664

Licensed firm

Principals

Offices

1

2 - 10

11+

Sole

+20

+35

+61

2 - 5

+70

+184

+431

6 - 9

+123

+323

+756

10 - 50

+216

+567

+1,327

51+

+431

+1,135

+2,654

The levies for 2024 are unchanged from 2023:

Authorised firm

Principals

Offices

1

2 - 10

11+

Sole

105

143

194

2 - 5

143

194

265

6 - 9

194

265

361

10 - 50

265

361

492

51+

+530

720

982

Licensed firm

Principals

Offices

1

2 - 10

11+

Sole

105

143

194

2 - 5

286

581

1,060

6 - 9

387

795

1,440

10 - 50

530

1,081

1,964

51+

1,060

2,160

3,927

Response to the consultation

This consultation has now closed and our response is available.

Read the response
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