The Solicitors Account Rules require us to account to our clients, on a fair and reasonable basis, for a sum in lieu of interest in respect of client monies held by the firm.
The Solicitors Account Rules also require us to hold such client money for the purpose for which it has been provided, so we have to hold the funds in an instant access account. That means any interest paid on the funds held is likely to be lower than a client would get depositing the funds themselves.
- Client monies will usually be held in general client bank accounts, where funds for different matters and clients are pooled.
- A sum in lieu of interest will be payable on amounts held in general client bank accounts on the following basis:
- 2.1. Interest will be calculated from the date the money has been cleared in our bank account and regarded by the bank as cleared funds. Simple interest will then be paid or credited when the monies are paid out for the purposes for which they were required.
- 2. 2. Interest paid will be based upon the interest rate payable by the NatWest Bank on the relevant amount as if it were held separately in our instant access general client account.
- 2.3. In normal circumstances, if the total amount of interest calculated is less than £75.00, no interest will be paid or credited to the client. This is because our administrative charges would exceed this amount. Where interest is payable, we will pay the amount gross, and it is the client’s responsibility to declare this amount to HMRC.
3. Client monies will usually be held in an instant access bank account to facilitate transactions. However, if specific instructions are received from the client requesting funds are placed on a term deposit or a separate designated deposit account, and this is appropriate (bearing in mind the nature and duration of the transaction), then the interest earned on such deposits shall be paid to the client in full, less any reasonable administration fee charged by ourselves in respect of setting up, administering and terminating such deposit account.
4. If we hold client monies in a separate designated deposit account (i.e. a specific bank account for a specific matter), all interest earned on that account will be credited to that bank account and paid to the client in full. We will generally pay interest to the client gross, and it is the client’s responsibility to declare this amount to HMRC. In designated deposit accounts and term deposit accounts, the bank may deduct tax at source. If this happens, the net sum will be paid or credited to the client.
5. This policy will be reviewed periodically.
BEWARE OF FRAUDSTERS – REMAIN VIGILANT – IF YOU ARE ADVISED THAT OUR BANK DETAILS HAVE CHANGED, PLEASE CONTACT OUR OFFICES IMMEDIATELY.