Interest Policy

As part of carrying out your instructions to us, we may need to hold your money in our client account. In holding client’s money, we have an obligation to pay interest on that money at a fair and reasonable rate and are required to put in place an interest policy; this policy sets out the guidelines for when interest will be paid and is summarised below.  All money is held in our general client accounts at Barclays Bank Plc and Santander Plc. Interest is paid to us on the aggregate of all client money held in the general client account and, subject to any interest paid to clients as above, is for the benefit of the firm.

To mitigate the risks associated with a service disruption (e.g., computer systems outage or a cyber related attack) which may impact the ability of our primary bankers (Barclays Bank Plc) to honour our payment obligations, the firm has established additional contingent banking facilities which comply with our own regulatory obligations, outlined in the Solicitors Regulation Authority (SRA) Accounts Rules.   

In the event of a bank failure, involving any of our banking providers, we will calculate the percentage of total funds held with each bank and apply this weighing accordingly. (E.g., Should the failed bank hold 10% of our total client balances, this weighting would be applied equally to all client ledgers) We will support our clients with any claims against the Financial Services Compensation Scheme Purposes (FSCS).  Please contact us if you have any concerns about this arrangement.

We aim to account to you for interest at a reasonable rate of interest, however as the holding of your funds is incidental to the carrying out of your legal instructions, the rate is unlikely to be as high as the rate you may be able to obtain when depositing the money with your bank.  All client funds will be held on instant access terms as set out in the Solicitor’s Regulation Authority accounts rules.

Any interest paid to you is paid without deduction for income tax (unless you are resident overseas – see below). As such it is your responsibility to inform HMRC of interest amounts received from us and the implications of this will depend upon your own financial circumstances. The same rate of interest will be paid on money held in general client account as would have been paid on the money if it had been held in a separate designated deposit account (assuming that this will offer a fair and reasonable outcome for the client and the firm).

Under the European Savings Directive regulations 2003/48/EC we are required to inform HMRC of payments of interest to relevant payees and residual entities in prescribed territories. Where you reside outside of the UK and EC, we are required to deduct income tax at the current basic rate and account for this interest to HMRC directly and pay you the net amount.

In accordance with Law Society guidance, if the bank in which we hold funds should fail we reserve the right to disclose to the FSCS the names and other details of clients whose money is held there in order for those clients to claim compensation up to the applicable limit, currently £85,000.

Interest will be calculated from the time the funds become cleared for interest purposes. Interest will be calculated on a daily basis and calculated on amounts held overnight from the day the funds become cleared for interest purposes.

Interest is usually added to client funds at the end of each matter. We will account to you for interest on sums in excess of £10,000 held by us for at least a week. We may also account to you for interest on smaller amounts if held for longer periods and if we have agreed in writing to do so. Any payment of interest is subject to a de minimis rule, made by the Law Society, which means that no interest will be payable if the interest amount involved is less than £50. 

Signing the Confirmation of Instructions and/or providing instruction to us to act for you, will confirm your agreement to our retaining of interest as above.

The rate of interest is based on our current bank rate which is linked to base rate and monitored regularly.  Please contact us for the current rates.