Interest Policy
This Policy applies to money held on behalf of clients in both general and separate designated client accounts. The Policy is in our Terms and Conditions of Business and also on our website.
Rule 7.1 of the Solicitors Regulation Authority Accounts Rules 2019 requires us to account to clients “for a fair sum of interest on any client money” held by us on their behalf.
Any client money received will normally be held in our general Client Account at HSBC UK Bank plc. This Account provides instant access to enable funds to be immediately available in order to facilitate transactions. Consequently, the amount of interest earned will usually be less than would be earned if a client had placed the money on deposit themselves.
Interest will be calculated and paid to the client at the rate from time to time payable on our general Client Account. The period for which interest will be paid will normally run from the date(s) on which cleared funds are received by us until the date(s) of any payment(s) from our Client Account.
In assessing what is a fair sum of interest to account to our clients, we have taken into account factors such as the administrative cost of managing our Client Account and also the period of time when a client might reasonably expect interest to accrue given the nature of their transaction and the reason that we are holding their money.
Accordingly, we do not account to a client for any interest where:
the amount of interest calculated is less than £50;
we hold a client’s funds for less than seven days;
we have received funds from a client or third party to pay either legal costs or a disbursement, such as Stamp Duty Land Tax; or
if there is an agreement with a client to contract out of the provisions of this Policy.
In certain circumstances, we may consider it appropriate to place client money in a higher interest-earning separate designated deposit account (e.g. the Money Market). This consideration is usually based on the amount of funds and the length of time that the funds are being held for. We will account to the client for the full amount of interest earned on that account.
The interest due, if any, is usually calculated on completion of a client’s matter. Any interest is paid gross, without any deduction of Income Tax, and where relevant it is the client’s responsibility to declare interest received to HMRC. In certain circumstances, we are required by law to provide information to HMRC in connection with interest paid to you on money we hold on your behalf.
This Policy is kept under regular review.