Every FCA-authorised payment institution and electronic money institution must pay annual fees to the Financial Conduct Authority to fund the cost of regulation and supervision. The fee structure is set out in the FEES chapter of the FCA Handbook, and the specific rates are published annually in the FCA's fees rates policy statement. While annual fees are a straightforward administrative obligation, misunderstanding the calculation methodology, missing payment deadlines or failing to submit the regulatory returns that feed into fee calculations can create unnecessary cost and regulatory friction. This guide explains how FCA annual fees work for payment institutions and EMIs.
How Are FCA Annual Fees Calculated?
The FCA funds its operations through fees levied on the firms it regulates. Total regulatory costs are allocated across fee blocks — categories that group firms with similar regulatory profiles. Payment institutions and EMIs are allocated to specific fee blocks within the G-block structure (payment services and e-money):
Fee block G003 covers authorised payment institutions (APIs) and registered small payment institutions (SPIs). The fee is calculated based on the firm's modified eligible revenue from payment services activities during the relevant reporting period. For APIs, this includes revenue from all regulated payment services. For SPIs, a flat minimum fee applies given the simplified supervisory approach.
Fee block G004 covers authorised electronic money institutions. The fee is based on average outstanding electronic money during the relevant reporting period — a metric that reflects the scale of the firm's e-money issuance business.
Firms that hold both PI and EMI authorisation pay into both fee blocks. The fee for each block is calculated by multiplying the firm's relevant metric (revenue or average outstanding e-money) by the applicable rate per £ of the metric, as published annually.
Minimum Fees and Thresholds
The FCA sets minimum annual fees for each fee block, ensuring that even the smallest firms contribute to regulatory costs. For the 2025/26 fee year, the approximate minimum fees are: APIs — £1,500; SPIs — £1,000; authorised EMIs — £1,500; small EMIs — £1,000. These are approximate figures — the exact amounts are published in the FCA's annual fees rates policy statement (typically issued in June/July).
Firms with very low revenue or outstanding e-money may find that the minimum fee exceeds what they would pay under the revenue-based calculation. In this case, the minimum fee applies. This is particularly relevant for newly authorised firms that have not yet commenced significant business activity.
When Are Fees Due?
The FCA invoices annual fees typically in July or August of each year, following the publication of the final fee rates. The payment deadline is 30 days from the invoice date. The FCA expects prompt payment and has stated that late payment may be treated as an indicator of financial difficulty — which can trigger enhanced supervisory engagement or requirements to demonstrate financial viability.
Firms that fail to pay by the deadline incur administrative fees. Persistent non-payment can lead to the FCA exercising its powers to cancel or vary the firm's authorisation. The FCA publishes lists of firms with outstanding fee debts, creating reputational as well as regulatory risk.
Regulatory Returns That Feed Fee Calculations
The accuracy of fee calculations depends on the regulatory returns submitted by firms. Payment institutions must submit annual financial information to the FCA via the RegData platform, including revenue from payment services activities and, for EMIs, average outstanding electronic money figures. These returns must be submitted by the applicable deadline — typically within four months of the firm's accounting reference date.
Late or inaccurate submission of regulatory returns has two consequences: it can result in fee calculations based on estimated figures (which may be higher than actual), and it can trigger supervisory concern about the firm's governance and reporting capabilities. The FCA has explicitly linked the quality of regulatory reporting to its assessment of a firm's overall compliance culture.
Managing Fee Burden
While firms cannot negotiate FCA fee rates, there are practical steps to manage fee burden effectively: ensure regulatory returns are submitted accurately and on time, so fee calculations are based on actual rather than estimated figures; verify that the firm is categorised in the correct fee block — misallocation can result in higher fees; review the fee invoice carefully against the firm's own revenue and outstanding e-money figures; budget for the annual fee well in advance, as the amount can be significant for smaller firms; and factor FCA fees into the firm's financial planning alongside other regulatory costs (including the Financial Ombudsman Service levy, FSCS levy where applicable, and compliance infrastructure costs).
Additional Levies and Contributions
In addition to the annual FCA fee, payment institutions and EMIs may be subject to additional levies including: the Financial Ombudsman Service (FOS) general levy, which funds the FOS's operating costs and is calculated based on the firm's fee block allocation; the Money and Pensions Service (MaPS) levy, which funds financial guidance and debt advice services; and, for firms within scope, the Financial Services Compensation Scheme (FSCS) levy. SPIs and small EMIs are generally exempt from the FSCS levy, but APIs and authorised EMIs may fall within scope depending on the services they provide.
Practical Tips
Payment firms should maintain a regulatory fees calendar with key dates for return submission, fee invoice receipt and payment deadlines. The compliance or finance team should review the FCA's annual fees consultation (typically published in January/February) and final policy statement (June/July) to understand any changes in rates or methodology. Firms experiencing genuine financial difficulty in meeting fee obligations should engage proactively with the FCA rather than simply missing the payment deadline — the FCA has discretion to agree instalment arrangements in exceptional circumstances.
Regulatory Counsel advises payment institutions and EMIs on regulatory cost management, FCA return submission and ongoing compliance obligations. Contact us for a free initial consultation.
Frequently Asked Questions
Authorised PIs and SPIs fall under fee block G003. EMIs fall under G004. Firms with both PI and EMI authorisation pay into both blocks.
Late payment incurs administrative fees and may be treated as an indicator of financial difficulty, triggering enhanced supervisory engagement. Persistent non-payment can lead to cancellation of authorisation.
Newly authorised firms pay a pro-rated fee for the first year based on the date of authorisation. Minimum fees still apply.
FCA regulatory fees are generally treated as an allowable business expense for corporation tax purposes. Firms should confirm with their tax advisers.