Commentary

V7.478 Bad debt relief—insurance claims

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.478 Bad debt relief—insurance claims

Part V7 Tax planning | Commentary

V7.478 Bad debt relief—insurance claims

When solicitors act for VAT registered businesses in relation to insurance claims it is common practice for the insurance company to pay the net amount of the legal fees and the business to pay the VAT element of the fee, which in many cases the business will be able to recover.

Example 9

A firm of solicitors provide legal services in relation to insurance claims. When the insured person is registered for VAT the insurance company pays the net amount and the client is expected to pay the VAT. Sometimes clients do not pay the VAT. This

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