VAT: Improper payments
The former finance director of a North-East law firm has been banned from working in the profession after using “residual client monies” kept in a separate deposit account to pay the firm’s VAT and staff salaries.
The Solicitors Regulation Authority (SRA) said Jacqueline Wilkinson made three improper transfers totalling over £139,700, but in each case the firm returned the money to client account within a month.
In a regulatory settlement agreement with Ms Wilkinson, the SRA said she had been finance director of Browell Smith & Co Solicitors since 2005 and between January 2013 and February 2018 was also its COFA.
The law firm held “a substantial amount of residual client monies in a designated deposit account that it had failed to return to clients promptly”, in accordance with the accounts rules.
Ms Wilkinson “knew that those monies belonged to various clients and that the firm had no legitimate interest or entitlement to them”.
In 2018, she “recommended and subsequently requested” the three transfers from the designated deposit account to the office account, creating a client account shortage.
In doing so, she knew that “client monies would be used improperly to pay the firm’s VAT liabilities and staff salaries”, the agreement said.
On each occasion, “the firm replaced the client monies in full within 32 days, rectifying the client account shortage.”
The law firm reported its concerns to the SRA about Ms Wilkinson in December 2018.
Ms Wilkinson admitted her conduct made it undesirable for her to be involved in a legal practice.
The SRA said she had taken full responsibility for her conduct and co-operated with its investigation.
“Ms Wilkinson’s conduct makes it undesirable for her to be involved in a legal practice because it undermines the trust the public places in the legal profession.
“Clients are entitled to rely upon people they deal with at solicitors’ firms to handle their money properly.”
An order under section 43 of the Solicitors Act 1974 was imposed, banning her from working for law firms in future without the SRA’s permission. Ms Wilkinson agreed to pay costs of £600.