Solicitors ― VAT treatment of services

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Solicitors ― VAT treatment of services
  • Types of services
  • Place of supply of services
  • Supplies of litigation, advisory and other general legal / tax services
  • Services directly related to land
  • Commission
  • Disbursements
  • Property search fees
  • Oath Fees
  • Other activities
  • More...

Solicitors ― VATtreatment of services

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VATand customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the VATtreatment of services provided by solicitors. For information on when VATneeds to be accounted for on services, see the Solicitors ― when VATneeds to be accounted for on services guidance note.

Types of services

Solicitors can deal with many types of legal matters including:

  1. litigation

  2. conveyancing

  3. trusts and other execution services

  4. general legal and tax advice

If the legal services are provided by UK based solicitors to UK resident customers, the services will be liable to VATat the standard rate, where they do not relate to land that is located overseas.

However, different VATrules apply to services supplied to overseas customers, or in connection with land located overseas. The VATtreatment of certain legal services can vary depending on the answers to the following:

  1. does the recipient belong outside the EU?

  2. is the recipient an EU private or non-business customer?

  3. is the recipient a relevant business customer belonging in another EU member state?

  4. if the services are supplied to a business customer in another EU member state, have the services been purchased for business or non-business purposes?

  5. what services are provided? For example, do the services relate to land and property and if so where is it located?

Place of supply of services

In order to determine whether a solicitor is required to charge VATon the services provided, it is important for the solicitor to establish the ‘place of supply’. Establishing the place of supply

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