The SRA Accountant's Report, Explained
Written and reviewed by the Legal Accountants editorial team. Last reviewed 28 July 2026.
If your firm holds or receives client money, you almost certainly need an annual accountant's report under the SRA Accounts Rules. It is one of the specialist duties that a general high-street accountant often does not deal with, so it is worth being clear on exactly what it involves.
This is who needs one, when it is due, when it actually goes to the SRA, and the exemption that a surprising number of firms qualify for without realising.
When You Need One
Rule 12.1 of the SRA Accounts Rules requires a firm that has held or received client money during an accounting period to obtain an accountant's report for that period. The report has to be obtained within six months of the end of the accounting period it covers, so a year ending 31 March needs its report by 30 September.
The report is prepared by a qualified reporting accountant, who reviews how the firm handled client money against the rules. Getting the records into shape for it is the firm's job all year, which is where keeping the client account reconciled matters.
When It Goes to the SRA
This surprises people: you do not send every report to the SRA. A report is only delivered to the SRA if it is qualified, meaning the accountant has identified a failure to comply that is serious enough to flag. An unqualified report is obtained and kept, not submitted.
That is not a reason to relax. The obligation to obtain the report stands whether or not it is qualified, and a qualified report, or a missing one, is exactly the kind of thing that draws SRA attention. The point is to run the client account so that the report comes back clean.
The Exemption Most Firms Overlook
You can be exempt from obtaining a report for a period if the client money you held was small: an average balance of £10,000 or less and a maximum of £250,000 or less at each reconciliation date. There is also an exemption where the only client money you held or received came from the Legal Aid Agency.
Plenty of firms sit inside the small-balance exemption without realising and obtain a report they did not strictly need, or assume they are exempt when they are not. It is worth checking your actual figures against both limits rather than guessing, because the average and the maximum both have to be met.
How We Help With the Report
We get your client-account records and reconciliations into the state a reporting accountant needs, deal with any residual balances and breaches first, and make sure the firm is ready well before the six-month deadline rather than the week before. Where you are exempt, we confirm that against your figures so you are not paying for a report you do not need.
There is also a live change to watch: the SRA's 2025 consultation on protecting client money proposes that all firms holding client money make an annual declaration about their position, exempt or not. We keep clients on the right side of where that lands. To get your report side in order, tell us about your firm.