Vat And Client Money Rules

Summary

In legal finance, issue a VAT invoice for your professional charges but not for third-party fees like surveyors fees. Record output tax of £160 for your services. Money received for billed professional charges is entirely business money. Client money must be promptly deposited into the client account per SRA Accounts Rules, and all receipts must be recorded, even if the client requests a delay in depositing funds.

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Which one of the following items received by a solicitor’s partnership is entirely business money? A. Money received from a client on account of costs. B. Money received for billed professional charges and disbursements. C. Money received for billed professional charges and disbursements and additional funds to complete the purchase of the client’s house purchase. D. None of the above.
In this scenario, the item that is entirely business money received by a solicitor’s partnership is:
B. Money received for billed professional charges and disbursements.
This is because such money represents payment for services already rendered and billed, making it entirely business money.
A client gives you a cheque for £*,* on account of costs and asks you not to pay it in until the following week as the client will have to transfer funds to meet the cheque. Which ONE or MORE of the following statements is/are CORRECT? A. You have no power to comply with such a request. Client money must be paid into the client bank account promptly. B. You may comply with such a request but must agree the arrangement in writing. C. If you comply with the request, you will make no entries in relation to the receipt until the money is paid into the client bank account. D. If you comply with the request, you must record the receipt because you are dealing with client money.
In this scenario, the correct statements are:
- A. You have no power to comply with such a request. Client money must be paid into the client bank account promptly.
- D. If you comply with the request, you must record the receipt because you are dealing with client money.
Here's why:
*. According to the Solicitors Regulation Authority (SRA) Accounts Rules, client money should be paid into the client account without delay.
*. Regardless of compliance with the client's request, the receipt of the client money needs to be recorded.
If you have any more questions or need further clarification, just let me know!
Nope it’s b and d
Case Rating: *
It looks like you're discussing VAT and client money-related scenarios. In the given scenarios:
*. For VAT issues, you will issue a VAT invoice for your charges and record output tax accordingly.
*. Business money received for billed professional charges is entirely business money.
*. Client money must be paid into the client account promptly according to the SRA Accounts Rules.
If you have more questions or need clarification, feel free to ask!