How we calculate annual fees

Fee-blocks: how we allocate our AFR

We allocate our total AFR between ‘fee-blocks’.

Fee-blocks group together firms that undertake similar regulated activities. Each firm is allocated to one or more fee-blocks according to the activities it carries out. So, a firm can be in more than one fee-block.

We assess how much the different types of activity will cost to regulate and allocate a proportion of the AFR to each fee-block on that basis. See chapter 2 of our fees policy statement PS25/8[2] for our 2025/26 allocation.

The fee-blocks across which the AFR is allocated are:

• A.0 – minimum fee
  • AP.0 – FCA prudential fee
  • A.1 – deposit acceptors
  • A.2 – home finance lenders and administrators
  • A.3 – general insurers
  • A.4 – life insurers
  • A.5 – Lloyd’s managing agents
  • A.6 – the Society of Lloyd’s
  • A.7 – fund managers
  • A.9 – operators of funds, collective investment schemes or pension schemes
  • A.10 – firms trading as principal
  • A.13 – investment mediation
  • A.14 – corporate finance advisors
  • A.18 – home finance mediation
  • A.19 – general insurance distribution
  • A.21 – firms holding client money and/or assets
  • A.22 – principal firms – appointed representatives
  • A.23 – funeral plan intermediaries and funeral plan providers
  • A.24 – Access to cash
• B – recognised investment exchanges, operators of multilateral or organised trading facilities, recognised benchmark administrators, recognised auction platforms and service companies
• C – collective investment schemes
• CMC – claims management companies
• D – designated professional bodies and OPBAS
• E – issuers and sponsors of securities and depository receipts
• G – firms registered under Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; firms covered by the Regulated Covered Bonds Regulations, Payment Services Regulations 2009 and 2018; Electronic Money Regulations 2011; Data Reporting Services Regulations 2017; and Consumer buy to let business under the Mortgage Credit Directive Order 2015
• J – credit rating agencies, trade repositories and securitisation repositories
   

The following fee-blocks fund our consumer credit costs:

• CC1 – firms with limited consumer credit permission
• CC2 – firms with a full consumer credit permission

How we calculate your fee

We calculate your fee using your firm’s ‘tariff data’. Tariff data varies across the fee-blocks and is used as a measure of the scale of a firm’s activities. Further details of the tariff bases can be found in FEES4 Annex 1A[3] of the Handbook. We divide a fee-block’s proportion of the AFR by the total ‘tariff base’ of all the firms in the block. This gives us a fee rate per unit.

We then calculate a firm’s fee by multiplying its tariff base by the fee rate.

Some examples of tariff bases we use are:

• annual income
• value of funds managed, or
• number of mortgages

So, for example, where the tariff base for fee-block A19 is annual income in relation to insurance distribution, we might set the fee rate at £5.00 for fee-block A19 when the annual income is greater than £100,000. The firm’s fee for A19 would then be £5 multiplied by each £/£ thousand or part thousand above the £100,000 threshold.

If you have received your first annual fee invoice, please see our newly authorised firms information on the Annual fees: online invoices[4] page.

Minimum standard fee

Most firms with the ‘A’ fee-blocks will pay a minimum fee of £2,000 to the FCA.

However, if your firm is dual-regulated by the Prudential Regulation Authority (PRA) and the FCA, the minimum fee will be £1,000 to the FCA and £600 to the PRA.

Some firms pay a reduced minimum fee. We use categories 1 to 5 on your invoice to indicate the minimum fee payable.

1. Small credit unions – with £0 to £0.5m of modified eligible liabilities (the tariff measure for the A.1 fee-block into which credit unions are allocated).
2. Non-directive friendly societies – with £0 to £0.5m in gross written premium and holds £0 to £1m best estimate liabilities for firms conducting general insurance activities (A.3 fee-block), and/or £0 to £1m in gross written premium and £0 to £1m best estimate liabilities for firms conducting life insurance activities (A.4 fee-block).
3. Medium-sized credit unions – with £0.5 to £2m of modified eligible liabilities.
4. All other firms also regulated by PRA under the Financial Services Act.
5. All firms that are regulated only by FCA under the Financial Services Act.

Extra fees

You may have to pay extra fees if your firm is in one of the ‘A’ fee-blocks and you are also a:

• payment services provider (£646)
• small electronic money institution (£1,418)
• large electronic money institution (£2,043)

This covers the costs of these particular activities which are separate from the FSMA A-blocks.

As set out in CP19/30[5] and subsequent Handbook Notice 74[6], there is a £50 administrative charge for firms who require paper invoicing (ie firms who haven’t registered for our online portal). Any firm who requires paper invoices/correspondence is required to pay this additional fee, which has been included in the fees invoices since 2024/25.

Find out more about extra fees in the Fees Manual[7] in the Handbook.

Thresholds

In each fee-block we set a threshold. Below the threshold a firm pays only the minimum standard fee as above.

We usually calculate the threshold to keep around 35% to 45% of firms below it in each fee-block. This means that the ‘smaller firms’ that do not use the FCA’s time are not unfairly charged.

Changes to your tariff data may affect how much you pay. So, for example, if your tariff data rises above the threshold, you will pay an extra fee for that fee-block.

If all your tariff data falls below the threshold, you will only pay the minimum fee. This applies however many fee-blocks your firm is in.

Your bill will comprise your minimum fee plus the sum of any extra fees due in every fee-block where you exceeded the threshold.

Cancelling or reducing your permissions

You will be liable to pay a full year’s periodic fee for the year in which you apply to cancel (based on April to March).

If you intend to cancel your authorisation or reduce your permissions, your application must reach us by 31 March (or before the last day in February if you are also regulated by the PRA). Any application received after this date will not affect the fees and levies invoiced for the following fee period, and they are non-refundable.

However if, due to the continuing nature of your business, the variation or cancellation does not take effect within 3 months from 1 April – that is, by 30 June - then the fees for this financial year remain due (see FEES 4.3.13 of the Handbook[8]).

Connect

You should apply for cancellation on Connect[9], our online system for applications and notifications.