After Liz’s recent Blog posting on this subject, we were contacted by a client. He informed us that he had been required to pay an additional quarterly banking charge despite sending the final receipts and payments to EAD so that it had been received by them prior to the date the charge was applied to the estate account. He queried this with EAD, who informed him that they needed to receive the final receipts and payments 7 days prior to the date a banking charge becomes payable to stop the charge from being applied to an estate account.
We checked this with EAD, and while there is no statutory basis for this timescale, they said they need time to process the final receipts and payments accounts, and to make the necessary changes to the records of the estate account. As a result, you need to factor in this 7 day processing period when sending the final receipts and payments account to EAD and calculating whether or not you need to reserve for a further quarterly banking fee. Remember that if the banking fee is applied leaving an overdrawn balance in the estate account, EAD will not close the account until you have paid it, which will have to be from your office account if you have not reserved for it. We have suggested to EAD that it would be worth publicising their approach in a forthcoming Dear IP.
Finally, a quick reminder of the dates that the quarterly banking charges are applied to estate accounts, namely: 1 January, 1 April. 1 July and 1 October.
