My client is paying the other side’s legal costs. Should the opponent’s solicitors issue a VAT invoice?

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My client has agreed to settle a claim against them and pay the other side’s agreed legal costs. The opponent’s solicitors have sent me a note of their costs but it does not look like a proper solicitor’s invoice. Should they re-issue a proper invoice?

In no circumstances may the opponent's solicitor issue a VAT invoice to your client, the paying party.

Your client is not in law entitled to receive an input tax credit, as the opponent's solicitor did not provide legal services to your client.

Your client should therefore receive a note of the other party’s costs in such terms that it cannot be mistaken for a tax invoice.

For more information, see HMRC’s VAT manual VATSC11534.

Disclaimer

While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.

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