Solicitors Accounts - misc. matters

You cannot pay this into the office account - the firm is not the payee. You must forward the cheque to the client/third party without delay. You have not dealt with client money because the cheque is not "money" and there is no obligation to record anything under rule 32.

You will want to keep a record on the correspondence file.

You can endorse the cheque to the client or to the third party on behalf of the clinet (Rule 17(b)).

This is dealing with client money and must be recorded under Rule 32 and is dealing with client money.

It is common to make the entries for receipt and payment on the same line.

You do not have to put it into the client account but this does count as dealing with client money and so you must record the receipt ad payment in the accounts.

There may be a breach of rule 22 (taking the client account into deficit), you need to immediately transfer money from the office account to remedy this.

• CR the office section of the client account with the amount of the abatement and the amount of vat.
• DR the profit costs account and the HMRC account on the office section

In the details column: Petty cash + reason

Then DR the OFFICE SECTION (even if client money is available) because petty cash is office money.

A separate leger does not need to be opened for the bank (Rule 32(6)) as long as it is an institutional lender which provides mortgages on standard terms in the normal course of their activities (e.g. banks and building societies) - otherwise a separate ledger will be necessary

However, these funds must be CLEARLY IDENTIFIABLE

This is what you write in the details column: Mortgage advance held for X Bank/Building Society

If it falls under the exception in 32(6) You just put the legal costs of the mortgage advance onto the client's ledger.

If not you simply transfer the debt from the lender's ledger to the client's