- In accordance with the SRA Accounts Rules, it is the Firm’s policy to account to its clients for a sum in lieu of interest on a fair and reasonable basis. If we hold money in a general client account on your behalf then we will account to you for a sum in lieu of interest.
- If we hold money in a separate designated client account on your behalf, we will account to you for all the interest earned on that account.
- We will not account to you for any interest in the following situations;
3.1 if the rate drops below 0.1% on our general client account;
3.2 if the amount calculated is £50 or less;
3.3 on money held for the payment of a professional disbursement;
3.4 on an advance to us into our general client account to fund a payment on your behalf in excess of funds already held for you in that account; and
3.5 if there is a written agreement to contract out of the provisions of this policy.
- If sums of monies are held in relation to separate matters for you then each sum will usually be treated separately. Therefore we will apply the fair and reasonable test to the individual sums without aggregation unless the matters are so closely related that they ought to be considered together.
- If money is held for a continuous period, and for part of that period it is held in a separate designated client account, we will account to you for a sum in lieu of interest for the rest of the period when the money was held in a general client account regardless of whether it is less than £50.
- We will calculate and pay interest once your matter has been concluded unless otherwise agreed.
- If money is held for a fixed term over a long period of time interest will be accounted quarterly or as agreed with you or other third parties.
- In calculating interest we will apply a rate that we believe reflects the market rate of interest paid on an instant access current account offered by our bank, Royal Bank of Scotland Plc over the period when interest is due. The rate will change from time to time.
- We will review the interest rates whenever the Bank of England changes its Bank Rate.
- In determining the period over which interest is to be calculated, we will look at the following: the period between the date when the relevant funds received by us clear our account and, if we send the funds electronically, the date when the funds are sent or, if we send the funds by cheque, five days after a cheque is raised.
- Where money is held in general client account, any interest paid to you will be paid without any deduction for income tax. As such it is your responsibility to inform HMRC of amounts interest received from us and the implications of this will depend upon your own financial circumstances. Where interest is held on a separate designated deposit account interest is usually paid net of tax (unless you have signed a declaration confirming your entitlement to receive bank interest gross).
Interest Rates for funds held on client account
£1 – £500,000 2.40%
£500,000 – 1,000,000 2.45%
£1,000,001 – 1,500,000 2.50%
£1,500,001 – 5,000,000 2.55%
In excess of £5,000,001 2.60%
Rates may vary with separate client agreement and funds in excess of £10m.
This policy was last updated 2nd January 2024.