Budget 2026: what it means for you and your business —

SRA Accounts Rules Compliance Support

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.

There is a group of law firms nobody is looking after. Firms whose client money stays within the Rule 12.2 limits need no accountant's report at all — which means no reporting accountant is examining their client account, ever. They must still comply with the Rules in full. A breach still reaches the SRA. But nobody is checking. In our experience, that is precisely where client-account discipline is weakest.

Does my law firm need an accountant’s report?

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.

What must I still do if I’m below the threshold?

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And of course Rules 2 to 5: client money paid promptly into client account, kept separate, available on demand, and withdrawn only for proper purposes.

How do you support law firms?

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.

We cannot sign your accountant’s report — and no firm without audit registration can

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.

On this page

Why LMJ Group

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.

Related services

Frequently asked questions

Does my law firm need an SRA accountant's report?

Only if you held or received client money — and not even then if all of it came from the Legal Aid Agency, or if your client account balances stayed within an average of £10,000 and a maximum of £250,000 under Rule 12.2. Below those limits no report is required, but every other Accounts Rule still applies in full.

Can LMJ Group prepare and sign our accountant's report?

No. SRA Rule 12.5 requires the reporting accountant to be a member of a chartered body and to be, or work for, a registered auditor — with no threshold exception. LMJ Group is not a registered auditor. We provide day-to-day Accounts Rules compliance support, and prepare firms for the registered auditor who signs their report.

How often must we reconcile the client account?

At least every five weeks, under Rule 8.3 — agreeing the bank statement balance to the cash book and the client ledger total, with the reconciliation signed off by the COFA or a manager. Differences must be investigated and resolved promptly. This is one of the most frequently missed obligations.

We're below the threshold and nobody checks our client account. Is that a problem?

It can be. The absence of a reporting accountant doesn't reduce your obligations by a single rule — it simply means nobody is checking whether you meet them. Breaches still have to be corrected and, if serious, reported. In our experience this is exactly where client account discipline drifts.

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Luton · Kettering · Leicester · Guernsey · Welwyn Garden City

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.