Payment in lieu of 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 money, we are required to put in place a policy setting out when we will pay clients a sum in lieu of interest. We are bound by strict accounts rules, and funds belonging to clients must be held separately to the monies owned by the firm. Most funds are held in a general client account which contains an amalgamation of sums held on behalf of many clients.

We aim to make a reasonable payment in lieu of interest in respect of funds held in a general client account.

Please note that the holding of your funds is incidental to the carrying out of your legal instructions and is not an investment product. The rate of return is therefore unlikely to be as high as the rate you may be able to obtain on a stand-alone investment. We are obliged to ensure that our client accounts are ‘instant access’ accounts, which impacts on the interest we can obtain, and therefore the amount which we can pay to clients.

The amount in lieu of interest that we pay to clients, having held client money will not exceed the sum we receive on that client’s money held in our general client account, which is held at the Royal Bank of Scotland. It may be less than is credited and will be subject to a minimum sum attributed to the sums we hold on your behalf. If negative interest rates are imposed by the bank, we reserve the right to make a charge for holding funds.

Where a sum in lieu of interest is paid to you, whether on funds held in our general client account, or in a separate designated deposit account, any interest paid to you is paid without any deduction for income tax. As such it is your responsibility to inform HM Revenue & Customs of amounts received from us in lieu of interest and to account for tax on the same. The implications of this will depend upon your own financial circumstances. Please notify us if you would prefer not to be credited with any sum in lieu of interest.

Payments will be calculated on cleared funds only when we can access them. On cheques or banker’s drafts this will be no less than 3 days after the cheque or draft has been deposited with our bank. For amounts received by debit or credit card, interest will start to accrue from the date of the actual receipt, which will be no less than and is usually 1 day after the transaction has been authorised. For direct transfers or same day payments the funds become cleared on the day after receipt.

Payments in lieu of interest will be calculated on a daily basis and calculated on amounts held overnight, starting from the day the funds become cleared for interest purposes.
Payments in lieu of interest will not be made if the total amount calculated for the period in respect of cleared funds held in a general client account is less than £50 and/or if we have held your funds for less than 14 days. However, if we have held client money in a designated deposit account, the full amount of interest will be paid.

Interest will be calculated when we send you an invoice for work completed and will be itemised as a credit on the invoice. If the sum charged for our fees exceeds the capital sums held on a client’s behalf, any payment in lieu of interest will be credited against the balance and only any balance exceeding the amounts due to the firm will be credited to the client’s ledger on an ongoing matter or transmitted to the client if all matters have concluded.

In each case where a payment of interest is made a document will be provided wherever possible electronically to the client concerned to serve as evidence to support the client’s tax declaration.

If you have any questions about this policy, please contact our accounts department who will be happy to help you.