Accounts, tax, client account bookkeeping and partner drawings for Nottingham law firms — from a practice that acts for law firms and nothing else.
The short version. Nottingham is in England. Your firm is regulated by the Solicitors Regulation Authority, your client account is governed by the SRA Accounts Rules, in force since 25 November 2019, and the annual obligation is an Accountant's Report under rule 12, obtained within six months of the accounting period end and delivered to the SRA only if it is qualified. Partners pay UK income tax rates and bands, and property transactions attract Stamp Duty Land Tax. We work with Nottingham law firms remotely, and only with law firms.
Nottingham is an East Midlands mid-market centre with a strong independent profession and an unusually large legal education presence for a city of its size.
The education presence is not a footnote here. Nottingham Law School at Nottingham Trent University is one of the largest law schools in the country and runs its own teaching law firm, NLS Legal, alongside the University of Nottingham's School of Law. For local firms that means a steady supply of trainees and paralegals — and it means the going rate for them is well understood on both sides of the table.
The firms themselves are mostly independents doing commercial, property, private client, family and employment work for East Midlands businesses and households. That is a profile where structure and partner tax questions dominate: when to incorporate, how to bring in a new partner without triggering the salaried members rules, and how much of each profit share has to be reserved for a January and a July that arrive whether the cash is there or not.
The Solicitors Regulation Authority regulates solicitors and law firms in England and Wales, and the SRA Accounts Rules are the rulebook for your client account. Everything else on this site applies to you without translation: the rule 12 Accountant's Report, the rule 12.2 exemption at an average of £10,000 and a maximum of £250,000, the five-weekly three-way reconciliation in rule 8.3, and the rule 4.3 requirement to deliver a bill or other written notification of costs before transferring client money to pay your own fees.
One change is coming. On 2 June 2026 the SRA announced that it has submitted a package of client money rule changes to the Legal Services Board and said that, subject to approval, it expects the new rules in force by early 2027. Under that package every firm holding client money would submit its report to the SRA rather than only firms whose report is qualified, with an annual declaration alongside it and the reporting accountant filing directly. It is not law yet. It is close enough to plan for.
A Nottingham independent doing conveyancing and probate holds client money throughout the year and needs the rule 12 report. A commercial or employment-only practice in the same city may hold nothing but money for its own fees and disbursements, in which case the rule 2.2 route removes the client account and the report together — provided the client is told in advance where and how the money will be held.
Nottingham does not have a Business and Property Courts district registry. The nearest are Birmingham and Leeds, both among the original five from 2 October 2017, so High Court business and property claims travel. County court, family and criminal work is heard in the city.
Nottingham Law School at Nottingham Trent University and the School of Law at the University of Nottingham are both here. A firm that recruits trainees carries roughly two years of cost before that person is a net contributor, and budgeting for it deliberately is the difference between a training programme and an annual argument.
In a Nottingham firm the first thing we look at is the partner tax reserve, because it is the number most often set by feel. A partner pays income tax plus Class 4 National Insurance on the whole profit share whether it is drawn or not, at a marginal 42% above £50,270 and 47% above £125,140, and payments on account fall due on 31 January and 31 July based on the prior year. Reserving monthly against a calculated figure turns both dates into transfers rather than events.
Client account bookkeeping and the five-weekly three-way reconciliation. The firm's annual accounts, the partnership or corporation tax return, partner tax reserves and drawings, payroll, VAT and the management figures you run the firm on. All the preparation that decides whether the report is clean.
Buzz Accounting Ltd is licensed by the AAT and a member of the ICPA. It is not a chartered accountancy firm and not a registered auditor.
Colin Ellis, ICAEW and a Responsible Individual, prepares and signs the SRA Accountant's Report itself. Rule 12.5 of the SRA Accounts Rules requires a member of ICAEW, ICAS, ACCA or ICAI who is, or works for, a registered auditor — and only that person can sign it.
Anstey Bond LLP is a separate firm, registered for audit by the ICAEW. Companies House OC360626.
No, and it is worth saying why rather than just asserting it. Everything runs remotely — video and phone around your court and client commitments, records and approvals handled securely online — which is how most firms prefer it once they have tried it. What you gain by widening the search past your postcode is a practice that already knows the Solicitors Regulation Authority, the SRA Accounts Rules and what a three-way reconciliation is, without being taught. Tell us where your firm stands and we will tell you honestly whether we can add anything.
The Solicitors Regulation Authority. Nottingham is in England, and the SRA regulates solicitors and law firms across England and Wales, so the SRA Accounts Rules govern your client account. If you held or received client money at any point in the accounting period, rule 12.1 requires you to obtain an Accountant's Report within six months of the period end, and to deliver it to the SRA only if it is qualified. Rule 12.5 requires that report to be prepared and signed by a member of ICAEW, ICAS, ACCA or ICAI who is, or works for, a registered auditor.
Only to the parts of your practice the SRA authorises. A Nottingham firm authorised by the SRA is subject to the SRA Accounts Rules for the client money it holds through that body. Opening in Scotland or Northern Ireland does not extend those rules to the new practice: solicitors in Scotland are regulated by the Law Society of Scotland under rule B6 of its Practice Rules 2011, and solicitors in Northern Ireland by the Law Society of Northern Ireland under the Solicitors' Accounts Regulations 2014. Two regulators means two rulebooks, two reporting deadlines and two sets of records, and the bookkeeping has to be built for that from the start rather than reverse-engineered at the year end.
The salaried members rules. Sections 863A to 863D of ITTOIA 2005, in force since 6 April 2014, treat an LLP member as an employee for income tax if all three conditions are met: at least 80% of their expected reward is disguised salary, they have no significant influence over the affairs of the partnership, and their capital contribution is less than 25% of that disguised salary. Fail any one condition and the member stays self-employed. Get it wrong and the firm owes PAYE and 15% employer National Insurance on the whole package, backdated. It is a conversation to have before the offer, not after.
Enough to cover the tax on the profit share, not on the drawings — that distinction catches out almost every new partner. Tax follows the allocated profit share whether the money is drawn or left in the firm, so a partner who draws conservatively still owes tax on the full share. The marginal cost is 40% income tax plus 2% Class 4 National Insurance above £50,270, rising to 45% plus 2% above £125,140. On top of that, payments on account on 31 January and 31 July are each half of the prior year's liability. A second-year partner pays a year and a half of tax in one January unless the reserve was built for it.
No. We work remotely with law firms across England and the whole UK, by video, phone and email, with records and approvals handled securely online. That is a deliberate choice rather than a limitation: it means the people looking at your figures work only with law firms, so nobody has to be told what lockup is, why a client account reconciliation is three-way, or what a fixed-share partner is. A firm two hundred miles away that already understands the England position starts from a different place than the nearest general practice accountant, who will spend the first meeting being taught how a law firm works.
Not every firm does. Rule 12.2 exempts you if all the client money you held or received in the period came from the Legal Aid Agency, or if the statement or passbook balance of client money did not exceed both an average of £10,000 and a maximum of £250,000. Both limbs of that second test must be met, and the average is worked out by adding up all your reconciliation balances and dividing by the number of reconciliations. Rule 2.2 goes further: a firm whose only client money is money for its own fees and unpaid disbursements can operate without a client account at all, provided it tells the client in advance where and how the money will be held.
A free, no-obligation conversation about where your client account and your firm's numbers actually stand. If we cannot add anything, we will say so.
One short email: what has changed in the Accounts Rules, the dates coming up, and one number worth checking in your firm. No spam, unsubscribe any time.