Commentary

V6.360 VAT recovery and practical points for solicitors

Part V6 Business by business

V6.360 VAT recovery and practical points for solicitors

V6.360 VAT recovery and practical points for solicitors

This paragraph examines how VAT recovery applies to solicitors and a number of other practical points for the profession. The liability of supplies commonly made by solicitors is considered in V6.359.

Recovery of VAT—solicitors

Partial exemption

As outlined in V6.359, solicitors can occasionally receive income which is exempt from VAT. Exempt income may include commission for insurance and finance related intermediary services. Solicitors with exempt income need to consider the topic of partial exemption which is addressed in V3.460–V3.470 as VAT cannot normally be recovered where it is used for exempt activities. However, where the level of exempt income is very low (as it often will be) there may not be a restriction in VAT recovery for the solicitor if its input tax falls within certain de minimis limits. The de minimis tests are covered in V3.465.

Specified supplies

Whilst VAT cannot normally be recovered in relation to exempt supplies or those

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