The Government says it will launch a programme of rebates for advisers who are hit by new interim consumer credit licence charges.
A paper released by the Financial Conduct Authority today also confirmed a 30 per cent discount for all sole traders and firms who apply for an interim licence before 30 November.
Money Marketing revealed in July it had written to firms with a consumer credit licence requiring them to pay up to £350 for interim permissions as part of the new FCA-regulated consumer credit market.
The news angered advisers, many of whom had already paid for “indefinite” licences.
The 30 per cent discount will see firms pay £245 for interim permissions while sole traders would pay £105 instead of £150 with the discount.
Proposed interim charges relate to the period when regulation for consumer credit regulation is handed from the Office of Fair Trading to the FCA between April 2014 and April 2016.
The latest FCA paper says: “The Government, having consulted the OFT and FCA, has decided that as a result of the transfer of consumer credit regulation to the FCA in April 2014, there will be a programme of rebates to consumer credit licence holders to reflect the closure of the OFT regime at 31 March 2014. This is designed to ensure the cost of the transfer of regulation is proportionate.”
Details of the rebate system will be released in the regulator’s consultation paper due to be published in October.
Since 2008 most applications for consumer credit licences have been granted on an indefinite basis with firms expected to make a one-off payment to be granted a CCL, alongside five-yearly maintenance charges.
The cost for these licences was increased to £670 from £575 for sole traders from 1 April this year and to £1,466 from £1,215 for partnerships or companies. This is accompanied by a maintenance charge every five years, costing £208 for sole traders or £505 for partnerships or companies.
Advisers need to hold a consumer credit licence if they spread their adviser charge over more than four instalments. Many advisers are also likely to hold a consumer credit licence if they advise on mortgages or provide debt advice.