Interest Policy

Thu, 12/15/2011 - 09:11 — mark.hodges

The Solicitors Accounts Rules 1998; were repealed by the SRA Accounts Rules on 6 October 2011. Under Rule 23 of SRA Account Rules the firm has to state its policy with regards to payment of interest on monies held in the firms' client account. This policy is stated below:

 

INTEREST POLICY

 

A payment in lieu of interest ("Interest") will not be paid where:-

  • Monies are being held for the payment of professional disbursements.
  • Monies are being held for the Legal Services Commission.
  • Where monies have not been deposit into the firms' client account under the instructions of the client / payee.

 

A payment in lieu of interest ("Interest) will only be paid if the following criterion is met:-

  • Interest will only be paid on cleared funds:-
    • It is the firms' policy that cheques are only treated as cleared funds on the eighth day after it was banked. For example:-
      • If a cheque was banked by our cashiers on Monday 2 February; it will be treated as cleared funds on Wednesday 11 February.
    • Monies received by CHAPS will be treated as cleared funds on the date of receipt.
    • Monies received by BACS will be treated as cleared funds on the day after receipt.
    • Credit cards and debit cards receipts will be treated as cleared funds on the day they are received into the firms' client bank account, this is normally 3 banking days after the payment is made.
    • Cash will be treated as cleared funds on the day it is banked.
       
  • Interest will only be paid if it exceeds the firms' de minimus limit of £30

 

Rate of Interest
As all clients monies have to be available for instant access and are "Ring-Fenced" by the bank, the interest rate applied will be the equivalent of the rate earned for the sum held in a National Westminster Bank plc Solicitor Reserve Account, this currently stands at 0.10%

The current rates can be found at:

http://www.natwest.com/commercial/online-services/g5/solicitors-reserve.ashx#tabs=section2

As stated above any payment made with regards to interest is made as Payment in Lieu of interest and no tax will be deducted at source.

Policy was reviewed and updated: December 2011