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Preparers Levy 2024-25
FRC PREPARERS LEVY 2024-25 FACT SHEET
The Financial Reporting Council (FRC) serves the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them. The FRC’s powers come primarily from the Companies Act 2006 (CA 2006) and the Statutory Auditors and Third Country Auditors Regulations 2016.
The FRC sets the UK Corporate Governance Code and UK Stewardship Code, UK accounting standards (UK GAAP) and actuarial standards; promotes high quality of corporate reporting; sets audit and ethical standards for auditors; monitors and enforces audit quality; and operates independent enforcement arrangements for accountants and actuaries; supervises and oversees relevant professional bodies.
The FRC carries out these responsibilities under the sponsorship of the Department for Business and Trade (DBT).
FRC Preparers Levy
By agreement with DBT and HM Treasury, the FRC is funded partly through a levy on organisations that benefit and fall within its remit. Details are available at: https://www.frc.org.uk/about-us/funding/. The following table helps you identify your organisation and what benefit it derives from the FRC's work:
| FRC Activities | Premium listed entities | Standard listed entities | AIM and Aquis listed entities | Funding Group Large private companies with T/O> £500m | GDR issuers | Asset Managers/Owners | Public sector organisations |
|---|---|---|---|---|---|---|---|
| FRS101/102 | • | • | • | • | • | ||
| Review of Financial statements | • | • | |||||
| Review of quality of audit. | • | • | • | • | |||
| Audit Enforcement Procedure investigation | • | • | • | • | |||
| Corporate Governance Code | • | • | • | • | • | • | • |
| Wates Principle | • | ||||||
| Stewardship code | • | • | • | • | • | • | • |
| UK Endorsement Board | • | • | • | • | • | • | • |
| IFRS Foundation funding | • | • | • | • | • | • | • |
| Levy discount | 0% | 20% | 50% | 50% | 75% |
The FRC's levies are currently operated on a non-statutory basis. Should this approach prove unsustainable, the FRC may request that the Secretary of State make regulations for the FRC to levy its funding on a statutory basis under Section 17 of the Companies (Audit, Investigations and Community Enterprise) Act 2004.
Calculation of the Preparers Levy
The 2024/25 levy is made up of a minimum levy of £2,076 and further amounts for companies above a certain threshold, with the rate per £million declining in five levy size bands. Companies with a Standard listing receive a 20% discount. AIM, AQUIS market and large private entities receive a 50% discount. Public sector organisations receive a 75% discount on the rates. An example of the levy calculation for a premium listed entity is as follows:
Organisation: ABCD PLC Customer number: Tariff data: £ 765,000,000
| Levy rate 2024/25 (Threshold) | Calculation (Rate x Quantity) | Levy | |
|---|---|---|---|
| Min fee | Up to £100m | £2,076 | £2,076 |
| Band 1 | £100m - £250m | £20.37 x 150 | £3,056 |
| Band 2 | £250m - £1000m | £15.54 x 515 | £8,003 |
| Band 3 | £1,000m - £5,000m | £15.03 x | |
| Band 4 | £5,000m - £25,000m | £0.2446 x | |
| Band 5 | > £25,000m | £0.0462 x | |
| Total levy | £13,135 | ||
| 0% Discount | £0 | ||
| Levy payable | £13,135 |
The levies requested from listed entities are calculated on the basis of their market capitalisation on 30 September 2023. For large private entities, the FRC calculates the levy based on the turnover disclosed in the latest annual report available at Companies House on 30 September 2023. For large private subsidiaries within a group, the FRC applies the levy to the total turnover of all those subsidiaries with a turnover of more than £500m and invoices the ultimate domestic parent for the levy based on that total. This has the effect of reducing the levy that would otherwise be requested.
Purchase orders
A number of organisations provide the FRC with a Purchase Order (PO) number to facilitate the payment process. In general, the PO number has been provided by the individual or team responsible for preparing the organisation's annual report and accounts.
Contact Us
If you have received your invoice from the FCA and you have a query, please contact the FCA contact centre on 0300 500 597 or [email protected]
If you have a query, please contact the Levy Collection Team at Adetiq on [email protected] (telephone 01273 764 511). If you have a policy related question on the levy, please email us on [email protected].
If you have a policy related question on the levy, please email the FRC on [email protected].
Financial Reporting Council July 2024