Client Account interest policy for client monies held in client bank accounts
Updated: January 2023
Client monies will normally be held in our General Client Account, in which amounts for different matters and clients are pooled.
- Interest will not be paid to you in the following circumstances:
- If the total amount of interest calculated over the course of a transaction is less than £50, no interest will be paid.
- No interest will be paid on money held for the payment of a professional disbursement if counsel or another professional has requested a delay in settlement.
- On any advance from us to you in our General Client Account to fund a payment on your behalf.
- Other than as may be required by the rules of professional practice.
- If there is an agreement between us to contract out of the payment of interest.
- Where your account has fallen into arrears for 30 days or more (i.e. where an invoice issued by us has not been paid in full for 30 days or more from the date of the invoice).
- Where interest is payable in our General Client Account a sum in lieu of interest will be payable (subject to any applicable withholding tax) on amounts held in our General Client Account on the following basis:
- Interest will be calculated daily on the balance held for each individual matter and paid to you when the matter has been concluded.
- Interest will not be compounded.
- Client monies will normally be held in an instant access bank account to facilitate transactions, however if specific instructions are received from the client requesting that funds be placed on a term deposit, interest earned on such term deposits shall be paid to the client in full
- In calculating interest we apply rates that we believe reflects the rates of interest on an instant access account offered by our bank HSBC, during the whole period of time that the interest is due.
- We will review interest rates whenever we are notified by our bank HSBC that there has been a change to the rate offered on an instant access account.
- Periods applicable for calculations of interest accrued in our General Client Account:
- If we receive funds, the period of interest will begin when the relevant funds clear into our General Client Account.
- If we send funds electronically, the period of interest on those funds sent will end on the date when the funds are sent.
- If we send funds by cheque, the period of interest on those funds sent will end on the date that the cheque is raised.
- When we transfer funds from our General Client Account to our office account to pay invoices, the period of interest on those funds will end on the date that the transfer is made.
Interest on funds held in our General Client Account is paid gross without any deduction of tax (unless you are resident overseas as noted below). It is therefore your responsibility to inform HMRC of any amounts of interest you receive from us.
- Clients who are resident outside of the UK
Where you are resident outside of the UK, we may be required by HMRC to deduct tax from the gross interest figure and pay the interest to you net of tax. If that is the case, we will notify you of the amount of tax deducted and the applicable rate of tax.