Subject to the circumstances set out in this policy, if we hold money for you in our general client account, we will pay you a gross sum in lieu of interest.
If we hold money for you in a separate designated client account on your behalf we will account to you for all the interest earned on such an account.
Interest will not be paid to you in the following circumstances:
We will calculate the interest and pay it to you when your matter has been concluded or unless as otherwise requested.
If any money is held on your behalf for a fixed term over a long period of time (eg rent deposit) we will calculate and pay interest quarterly or as agreed with you or other third parties where applicable.
In calculating interest we apply a rate that we believe reflects the market rate of interest paid on an instant access current account offered by our bank, National Westminster Bank plc, over the period that interest is due.
We review our interest rates quarterly and also whenever the Bank of England changes its Bank Rate.
For funds that are to be held by us in a separate designated client account we will always negotiate with our bank to endeavour to obtain the best available interest rate.
In determining the period that interest is to be calculated, we look at the following:
Interest on funds held in our general client account is paid 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.
When funds are held in a separate designated client account, interest is usually paid net of tax unless you have signed a declaration confirming your entitlement to receive bank interest gross.
The European Savings Directive regulations 2003/48/EC requires us to inform HMRC of payments of interest to relevant payees and residual entities in prescribed territories. Where you reside outside the UK and EU, 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.