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client account has paid interest

what should I do?

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I have a Barclays client account, which has just paid interest. Not a lot, 55p. I thought I opened a non-interest bearing account 3 years ago, but it seems not - we have only used the client account in the last 2 months.

I'm ACCA and think that I read somewhere that you're meant to work out (somehow) who is owed what portion of the interest and distribute accordingly. 

Is my worry of being struck-off if I just take the 55p OTT?

What would you do?

Thanks

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05th Mar 2019 14:43

You've just reassured me that I've been right not to handle clients' money over the last 30 years.

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to lionofludesch
05th Mar 2019 15:03

First time I have and TBH its a real hassle, although I have had a client pay £1k o/s bills from their tax refund.

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05th Mar 2019 15:57

The ICAEW rules say that you have to distribute interest if it's material.

Why don't you call the ACCA and find out - or read their guidance.

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to Cloudcounter
06th Mar 2019 08:16

ACCA wrote:

Interest payable

In respect of all monies held by a firm on behalf of clients, the
firm must pay clients interest of not less than the amount which would have been earned by way of gross interest if all clients’ monies held by the firm had been kept in separate interest-bearing accounts at the small deposit rate with the bank concerned. However, this obligation may be over-ridden (except in the case of trust accounts) by express written agreement between the firm and clients. For example, clients may agree to forgo sums of interest of less than, say, £10.

Yay, so now I have to work out a 55p split.

Think my T&Cs are about to change ...

Thanks (1)
to atleastisoundknowledgable...
06th Mar 2019 10:59

atleastisoundknowledgable... wrote:

ACCA wrote:

Interest payable

In respect of all monies held by a firm on behalf of clients, the
firm must pay clients interest of not less than the amount which would have been earned by way of gross interest if all clients’ monies held by the firm had been kept in separate interest-bearing accounts at the small deposit rate with the bank concerned. However, this obligation may be over-ridden (except in the case of trust accounts) by express written agreement between the firm and clients. For example, clients may agree to forgo sums of interest of less than, say, £10.

Yay, so now I have to work out a 55p split.

Think my T&Cs are about to change ...

Actually, if you read the blurb, it says you should pay the interest which would have been earned.

Whether you actually get it seems to be irrelevant. You still have to pay the client.

Thanks (1)
06th Mar 2019 10:25

Work out the splits and ask the clients if they want it paid.

Then change the account to non interest bearing.

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to Insolvency Practitioner
06th Mar 2019 10:55

Insolvency Practitioner wrote:

Work out the splits and ask the clients if they want it paid.

By post ?

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06th Mar 2019 11:04

or place 55pence in the nearest charity box.

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to memyself-eye
06th Mar 2019 11:12

How does that help ?

The client still needs him interest to comply with ACCA's lack of de minimis provisions.

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to lionofludesch
12th Mar 2019 11:24

wouldn't the administration cost wipe out the 55p

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to C Graham
12th Mar 2019 11:37

Why would that bother the ACCA ?

Not their problem.

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12th Mar 2019 10:32

Hi, I had an ACCA compliance visit two years ago and was told not to worry about it. The interest is so small and the time we hold client money too short. They were happy for me to take the interest.
I have changed my terms which now state interest will be donated to charity but that was a separate decision.

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12th Mar 2019 10:34

pay 55p to charity and wait to be admonished by the ACCA on their visit

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13th Mar 2019 13:10

Ask Barclays to make a 55p interest correction. They have to reverse the original transactions. It isn't sufficient for them to impose a charge of 55p.

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