Amendments to Solicitors Accounts Regulations have arisen following the passing of the Personal Insolvency Act 2012. Solicitors are now eligible to act as personal insolvency practitioners (PIPs). The 2013 Amendment clarifies that moneys received by a solicitor whilst acting as a PIP are regulated under the solicitor accounts regulations.
This amendment was enacted in December 2013 and has been in effect since 1 January 2014.
What regulations mean for Solicitors
The regulations now include a revised Accountants Report. This includes reporting on insolvency arrangement moneys, in addition to client moneys and trust moneys. If you are a Solicitor involved in PIP make sure to inform your auditor so that this area of your business is fully reviewed in the Accountants Report.
Under the previous regulations (2001-2006) solicitors had the option to lodge trust moneys directly into a client’s account and then transfer them to a trust account. Under the PIP regulations this option no longer exists. The solicitor must pay all moneys received directly to an insolvency arrangement account.
The revised Solicitor Account Regulations
The Solicitor Account Regulations have been amended to reflect the changes in where moneys can be lodged. So it is now considered a breach of the regulations to lodge insolvency moneys to another account.
You can read the full regulations document here
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The above content is personal to the writer and should not be taken as legal advice.