Budget 2026: what it means for you and your business —
In short
Law firms holding client money must comply with the SRA Accounts Rules every day of the year — not merely at report time. We maintain your client ledgers and cash book, carry out the five-weekly client account reconciliations that must be signed off by your COFA (Rule 8.3), manage breach registers and residual balances, and meet the six-year retention requirement (Rule 13). We also run voluntary Accounts Rules health checks.
Only if you held or received client money during the accounting period — and even then, not if:
– All the client money you received came from the Legal Aid Agency; or – Your client account balances stayed within an average of £10,000 and a maximum of £250,000 (Rule 12.2).
Both limits must be satisfied. They are measured across all client accounts, joint accounts and clients’ own accounts you operate, using the statements obtained under Rule 8.2.
Below those limits, no report is required — but every other Accounts Rule still applies to you in full.
Everything except obtain the report. Specifically:
Rule 8.1 — maintain client ledgers, a list of client balances with a running total, and a cash book. Rule 8.2 — obtain bank statements at least every five weeks. Rule 8.3 — complete a client account reconciliation at least every five weeks, agreeing the bank balance to the cash book and the client ledger total, signed off by the COFA or a manager. Rule 6 — correct breaches promptly on discovery. Rule 13 — store accounting records securely and retain them for at least six years.
And of course Rules 2 to 5: client money paid promptly into client account, kept separate, available on demand, and withdrawn only for proper purposes.
Legal cashiering and client account bookkeeping — we keep the ledgers, cash book and client balance listing the Rules require.
Five-weekly reconciliations — prepared, evidenced and presented to your COFA for sign-off, on time, every time.
Breach register and residual balances — maintained properly, so that when the SRA does ask, there is an answer.
Voluntary SRA Accounts Rules health checks — a review that finds weaknesses before they become breaches. This is a voluntary engagement and is expressly not a report under Rule 12.
Reporting-accountant readiness — for firms above the threshold, we prepare you thoroughly for the registered auditor who will sign your report.
Plus, of course, your firm’s accounts, tax, payroll and partner tax returns.
SRA Rule 12.5 requires an accountant’s report obtained under Rule 12 to be prepared and signed by an accountant who is a member of a chartered accountancy body AND is, or works for, a registered auditor. There is no threshold exception. LMJ Group is not a registered auditor, so we do not prepare or sign accountant’s reports, and our compliance reviews are voluntary engagements that are not — and must not be treated as — a report under Rule 12. Where a report is required, we will prepare you thoroughly for your reporting accountant.
We serve the firms nobody else is watching — below the reporting threshold, but still fully bound by the Rules.
Five-weekly reconciliations, on time — the Rule 8.3 obligation most firms handle late.
Health checks that find breaches before the SRA does.
Honest about our limits — we cannot sign your report, and we say so up front.
Chartered (ICAEW) — with genuine experience of solicitors’ practices.
This page provides general information about the 2026/27 UK tax year and is not advice on your particular circumstances. Tax and regulatory rules change frequently. Please contact us before acting, or refraining from acting, on anything set out here. LMJ Group is a firm of Chartered Accountants regulated by the ICAEW. LMJ Group is not a registered auditor and does not provide audit services. Last reviewed: July 2026.
