Ant_87

Hi all. I have a query on whether to be charging our output VAT on a bill to our client where we have paid an out of scope fee on behalf of the client. For example - if we receive an invoice for £1,000.00 for a financial dispute resolution mediation meeting between two parties and a private Barrister, the invoice is addressed to us as out of scope of VAT as it falls under the scope due to their yearly income. Would we then bill the fee to our client as £1,000.00 plus our output VAT of £200.00 as we are deemed to have added our professional service to the charge by reviewing the meeting notes and progressing their case? Many thanks in advance.

Hi all, As the thread title suggests, I have a query on VAT payment by a third party on our bill of costs, under the below guidance. "If the solicitor’s client is a registered fully taxable person, and the supply of legal services is obtained for the purpose of the client’s business, the client will be entitled to an input tax credit in which case the indemnifying party need only pay the costs exclusive of VAT" I work for a firm of Solicitors and part of our service is to recover debts for our clients who are VAT registered. Our bill of costs is payable by the debtor/third party, whom we have recovered the debt from. As I understand it, they only need to pay the net aspect of our bill and not the VAT. That then poses the question of who pays the VAT to clear the bill on our system? Do we send the bill to our client to pay the VAT element so they can claim it back and then we ask the debtor to purely pay the fees aspect? Thanks in advance for any help.