Give us your details and we’ll be in touch asap

Insights

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Business Services  •  Business Tax

Accounting Update: New Solicitors Regulation Authority (SRA) Accounting Rules for 2019

By RJP LLP on 27 November, 2019

The Solicitors Regulation Authority (SRA) Accounting Rules have been reformed with effect from 25th November 2019, in order to allow solicitors more flexibility in the way they can work.

The new SRA Accounting Rules will continue to prioritise the protection of client money, but they are more outcome-focused, concise and targeted than the existing rules. Unlike the old rules, they grant solicitors more chance to use their own professional judgement when it comes to protecting client money, rather than having to comply with lots of specific technical rules. For example, the new rules allow solicitors to ensure payment transfers are made “promptly”, rather than stipulating a fixed time period of 14 days for transferring of costs and the next working day for banking client money. The exact definition of “promptly” is left open for the solicitor to decide.

How have the SRA Accounting Rules changed?

There were previously 52 SRA Accounting Rules (outlined in the 2011 version) but this has been scaled down to 13. The main changes being as follows:

  • Money from the Legal Aid Agency is no longer specifically included;
  • Disbursements under rule 8.4 cannot be transferred unless they are included on a bill or written notification of costs. If the firm usually included disbursements on a completion statement, then it will be necessary to ensure that the legal cashier either has a copy or is considering moving all disbursements to the bill;
  • It will be possible to ‘opt-out’ of holding client money via use of Third Party Managed Accounts (TPMAs). If this is the case, both clients and the SRA should be advised where a TPMA is used and this needs to be monitored;
  • Written policy should be put into place outlining the firm’s accounts procedure and the dates in which transfers/payments etc will be made. Provided a firm is already compliant, very little else needs to change. By and large ‘adopting’ the current rules will ensure firms are meeting these new requirements;
  • All SRA registered solicitors also need to display an SRA digital badge on their company website

If you have any questions relating to the new SRA Accounting Rules, please contact Ben Simper at bs@rjp.co.uk

 

Read more articles like this

All accountants are not the same

Planning for 2020? An audit can bring significant value to a fast growing business

VAT: Now Partnerships and Sole Traders can join a VAT group

6 pre-Brexit planning tips for business owners

Compliance update: HMRC ramps up ‘VAT gap’ investigations

Share this:

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Image

There are many benefits to asking your accountant to handle probate

Did you know RJP LLP are licensed by the ICAEW to offer a full probate service.

This can save you time and money, plus we can advise on matters related to inheritance tax at the same time.