Fixed costs changes – 1st April 2024

As practitioners will no doubt be aware, there are various options for fixed costs to be taken to cover applications, first and subsequent general management periods and where the Protected Party’s (P’s) assets reach below a certain threshold.  These practice directions have been in place since 2017 and, at the time of writing, are over 7 years old.  It is felt the provisions are out dated and as a result, the practice directions have now been updated.

When do these changes take effect?

Where the period ends on or after 1 April 2024.  If an application is made, these fixed costs take effect where the order for costs is dated on or after 1 April 2024.

What are the main changes?

Category I – application to a point a deputy for property and affairs – fixed costs increased from £950 to £1,204 plus VAT

Category II – Trustee Act 1925 Application – up from £500 to £633 plus VAT

First year general management (used to be category III (a) but now category IV (a)) – increase from £1,670 to £2,116 plus VAT (increase of £446 plus VAT)

Subsequent general management years (used to be category III (b) but now category IV (b)) – increase from £1,320 to £1,672 plus VAT (increase of £352 plus VAT)

Limited estates – the threshold has increased from £16,000 to £20,300.  However, it should be noted that P’s estate can now include the value of P’s property, even if P resides therein (albeit an additional application is required to secure the costs against the property).

In addition, a new category III has been introduced to allow for fixed costs of £633 plus VAT to be taken by an existing deputy in relation to an application for additional powers or authority (applications made under Practice Direction 9D, para 4 (a-q)).

What else is new?

If the court appoints a Health and Welfare deputy, they can take an annual management fee of 2.5% of P’s net assets on the anniversary of the court order making the appointment.  This used to be to a maximum of £555 plus VAT, but has now increased to a maximum of £703 plus VAT.

The fixed fees for preparing the OPG reports have increased from £265 to £336 plus VAT.

Fixed fees for the preparation of a routine tax return have increased from £250 to £317 plus VAT.

In addition, the deputy may instruct a specialist from within their own practice to prepare these returns, however, they must ensure three quotes are obtained (including one from their own practice) for the cost of this work and a best interests decision must be recorded.  Per ACC and Others, authority from the court must be obtained if this cost is likely to exceed £2,000 plus VAT and disbursements).

We have highlighted the main changes arising from these updates rules, however, do check out the full practice directions here.

As ever, we hope the above will provide a helpful update.  Do be sure to get in touch should you have any queries or questions arising from this short piece, and we will be more than happy to further assist you.