The SRA is seeking a practising certificate fee of £240 (up from £190) for 2026/27, with compensation fund contributions rising alongside it. Together they take the SRA element of an individual solicitor’s October renewal from £260 to £360, a rise of 38% in a single year. The figures remain proposals until the Legal Services Board approves them.
Where does the practising certificate fee go?
The overall funding requirement for 2026/27 is £111.5m, an increase of £25m or 29% on the current year. Individuals meet 40% of that. The remaining 60% falls on regulated firms, charged in bands according to turnover, so a firm employing solicitors meets the cost from both directions.
Practising fees are not the whole picture. The draft plan puts the SRA’s total budget at around £195m. Roughly £59m of that comes from SQE income, which broadly covers the cost of running the assessment, and a further £19m is recovered from the compensation fund. Practising fees supply £112m. The comparable figure for the current year is £87m.
Sarah Rapson became chief executive in November 2025, and the plan follows a period of listening and engagement she led. She has presented it as a bridge between the SRA’s current approach and its next Corporate Strategy for 2027 to 2030. Her reasoning is blunt: the regulator cannot meet today’s demands by doing more of the same. The draft Business Plan and funding requirement sets out what the money is meant to buy. Four priorities run through it: operational excellence, earlier identification of risk, a sharper focus on the big issues, and better collaboration.
Why has the compensation fund contribution gone up?
The compensation fund protects clients who lose money when a law firm closes. Two pressures have landed on it at once.
The unexpected closure of PM Law Limited in February 2026 drove up both the volume and the value of claims. Clients have claimed £20m to date. It is the second shock in short order, after Axiom Ince. Interventions are running ahead of trend as well. There were 35 between November 2025 and mid-April 2026, against 42 across the whole of the 2024/25 business year. Storage costs for documents and files seized from intervened firms add to the bill.
Contributions are expected at £120 for an individual solicitor and £3,600 for an SRA-regulated firm, collected as part of authorisation and practising certificate renewal each October. Anyone who followed the return of accountants’ reports under the client money rules will recognise the shape of it. The cost of client protection keeps moving back towards the regulated.
The 70/30 split changes who carries it
The consultation closed on 22 June 2026. The SRA’s response in July proposed one substantive change to what it had originally put forward. Where the compensation fund currently draws half its money from individuals and half from firms, the split moves to 70% from individuals and 30% from firms.
This is not a uniform increase. Where firms pay contributions on behalf of the solicitors they employ, the SRA calculates that firms employing 29 solicitors or fewer, around two thirds of all firms, will pay less into the fund overall. The weight moves from the firm to the individual. It helps the small practice. It does nothing for the employed solicitor who settles their own renewal.
What the profession said
The Law Society backed the underlying objective while pressing hard on proportionality, arguing in its consultation response that regulation must remain evidence-led and targeted. It singled out small firms and legal aid providers as particularly exposed. Sustained increases in regulatory cost, it warned, risk contributing to contraction in already fragile parts of the market, particularly those serving vulnerable clients and publicly funded work.
The response made a further point that has little to do with money. Firms are adopting AI and other emerging technologies without clear regulatory guidance on where the line falls, and the Law Society sees professional liability implications in that gap. Higher regulatory cost and unresolved regulatory questions are arriving together.
Ahead of publishing its final plan, the SRA said it would act on some of what it heard. That includes providing more detail and regular updates on progress, and more information on the impact of its work. It is a transparency concession rather than a financial one.
A second point in the draft plan has drawn less comment. The SRA says the need to build reserves is likely to continue through 2027/28, while it develops the corporate strategy meant to set a path back to stable funding. On the regulator’s own account, this is not a one-year correction.
One further caveat is easy to miss. The £360 figure covers the SRA element only. The total an individual pays at renewal also carries contributions to the Law Society, the Legal Services Board, the Solicitors Disciplinary Tribunal and the Legal Ombudsman, each set separately.
Every practising solicitor pays this, and the combined SRA element of renewal moves from £260 to £360 in a single year. For sole practitioners and small firms the turnover-banded firm charge compounds it. The 70/30 compensation fund shift cuts both ways: around two thirds of firms end up paying less overall, while individuals carry more of the fund than they did before.
What should solicitors do before October?
Renewal runs each October, and the practising certificate fee and compensation fund contribution are collected together. Three things are worth settling before the window opens.
Establish who pays. Many firms meet both charges for the solicitors they employ. The move to a 70/30 split changes the arithmetic depending on which side of that line you sit.
Treat the figures as provisional. Everything above remains a proposal until the Legal Services Board approves the funding requirement and the contribution levels. The two went forward as separate applications.
Budget for the direction, not the number. An extra £100 in one year is absorbable for most. A regulator that expects to keep rebuilding reserves through the year after that is a different planning assumption, and it lands on firms already carrying the transfer of AML supervision to the FCA.