The Financial Conduct Authority (FCA) has launched a consultation on proposals to cut the charge for late or outstanding regulatory returns from £250 to £100, arguing that the lower fee would be fairer and more proportionate, particularly for smaller firms.

The regulator said compliance rates have improved since the original fee was introduced, helped by a series of changes to its systems, including updated payment processes and the launch of My FCA earlier this year.

The platform has now been used by 80% of firms, which the FCA said demonstrates the impact of its efforts to simplify and modernise reporting requirements.

As part of the consultation, the FCA is also proposing clearer guidance and improved notifications around reporting deadlines. The intention is to help firms better understand their obligations and avoid incurring avoidable administrative costs.

In addition, the FCA plans to remove three data collections for insurance firms that it said are no longer required. The move forms part of its wider commitment to streamline regulatory reporting and reduce unnecessary burdens on firms.

The regulator said the consultation reflects its aim to adopt a “smarter” regulatory approach by refining processes, removing duplication and improving the clarity of requirements.

Firms affected by reporting deadlines over the Christmas and New Year period have also been given temporary relief. The FCA confirmed it will delay issuing late fees for any returns due between 22 December 2025 and 5 January 2026, with charges only applied if submissions remain outstanding on 6 January.

The proposals form part of the December 2025 Quarterly Consultation, with the FCA encouraging firms to review the chapter on Late Fee Reduction and respond to the consultation in due course.