VAT on legal aid work
In force from 4 July 2008
The legal aid contracting system has evolved since monthly payment arrangements were first introduced by the Legal Services Commission.
The treatment of these regular payments, previously known as standard monthly payments, was changed by rule 21(2) of the Solicitors' Accounts Rules 1998 that came into effect on 1 May 2005. You must pay these into your office account, rather than choosing to pay them into either your client or office account.
To reflect rule 21(2) we have launched a simplified method of accounting for VAT which is described in this practice note. This replaces our 2001 guidance.
We recommend that you refer to this online version to stay up-to-date with changes.