Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Consultancy claim

06 September 2011
Issue: 4320 / Categories: Forum & Feedback
A consultant who uses the VAT flat-rate scheme is in dispute with a client and is incurring legal costs over an unpaid fee

My client is a consultant Mr A who is in dispute with one of his clients Mr B. Unfortunately Mr B has refused to pay one of Mr A’s invoices and they are now in arbitration proceedings.

Mr A’s solicitor has been representing him in the claim against the client and the legal fees will be paid by Mr A’s insurance company linked to his debt protection policy but not the VAT element because my client is VAT registered.

My client (Mr A) uses the flat-rate VAT scheme (14.5% applying) and therefore cannot claim input tax so he is effectively out of pocket with the VAT on the legal fees and my questions relate to this.

Would the insurance company recognise the scheme and agree to pay the VAT element? Is there any way that...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon