The VAT treatment of disbursements and expenses—a recap

Table of contents

• What is the VAT position on disbursements?
• How has this position been affected by the First-tier Tax Tribunal’s (FTT) decision in Brabners LLP v HMRC and, more recently, the Court of Appeal’s judgment in British Airways v Prosser?
• The Law Society updated its on VAT and disbursements in October 2019. What does the Law Society recommend?
• Can we expect clarification from HMRC?
• What should practitioners do when considering VAT on disbursements?

Article summary

Tax analysis: Michael Hunt, senior associate at Herbert Smith Freehills LLP, examines HMRC’s current stance on the VAT treatment of disbursements and expenses, including how a recent Court of Appeal decision has affected the position.