Solicitor's Bill

shaz77_2

Hi

I completed the purchase of my house on 18.12.09, I contacted my solicitor at this point who informed me everything was completed and he would be sorting out the invoice etc the following week.

I got the invoice yesterday from the solicitors, it dated 05.01.10, I have been charged the VAT rate of 17.5%, would it be reasonable of me to ask for the 15% VAT rate to be applied as the completion of the purchase was finalised before the turn of the year?

Thanks in advance.

Doozergirl

Yes. Or the equivalent reduction in his fee seeing as no-one should be invoicing at 15% now. I've never not had to pay on the day of completion!

shaz77_2

Doozergirl wrote: »

Yes. Or the equivalent reduction in his fee seeing as no-one should be invoicing at 15% now. I've never not had to pay on the day of completion!

Do you mean a 15% reduction in his fees?

sunshinetours

shaz77 wrote: »

Do you mean a 15% reduction in his fees?

I wouldn't have thought so no! The VAT difference reduction of 2.5% of the fee. If the fee is £500 + VAT for instance then a £12.50 reduction

silvercar

Strictly speaking the invoice should have been produced prior to 31/12/09 in order to charge you only 15% VAT. The solicitor should have been quicker off the mark. As this is his fault, it would be in order for him to offer you a reduction.

Richard_Webster

Regardless of the date of the invoice, as I understand the rules, if the work was substantially completed before the end of 2009 then it is still appropriate to charge 15% VAT rather than 17.5% even thought eh invoice is dated later.

The changes in the rates cause problems with solicitors' computer systems and they probably altered theirs so that all bills produced from the start of 2010 had VAT at 17.5% - so they will have to make a manual adjustment - so I would ask them to do that.

shaz77_2

I am going to send my solicitor the following email, will this suffice?

Hi ****

I received your invoice on 06.01.10, the invoice includes a VAT charge of 17.5%, as the house purchase was completed on 18.12.09 should the VAT rate of 15% have been applied?

Could this be reviewed please?

Regards
Shaz

Tozer

silvercar wrote: »

Strictly speaking the invoice should have been produced prior to 31/12/09 in order to charge you only 15% VAT. The solicitor should have been quicker off the mark. As this is his fault, it would be in order for him to offer you a reduction.

Completion isn't the end of the work as there are post completion formalities to take care of which can take some time.

WestonDave

Its slightly more complicated - the VAT rate depends on the tax point which is a defined term.

In general terms the tax point is the earlier of when the money was paid, or when the invoice was issued (which should be immediately the work is completed).

So if you paid for the bill as part of the funds you paid in for completion (normal practice) then that would be the tax point and 15% would apply. If you have still to pay it then the tax point is the invoice date which would initially suggest 17.5%.

However it is in order to split rates where work was done before the change - so in this instance you could justifiably ask for most of it to be at 15% as the work was all done prior to the change. It is true that the work isn't actually finished until registration is done which can be up to a month after completion I think so to a degree its not necessarily the case that the invoice should have been produced by the 31st especially if they were shut down for part of the Christmas period.

All things considered ask for a reduction - most business would be offering this to show goodwill especially as it is of no benefit to them as whatever VAT you pay, they simply pass on to HMCE. If you sound like you know your stuff and are polite you are more likely to get a positive response than going in guns blazing from the off.

Radiantsoul

Richard_Webster wrote: »

Regardless of the date of the invoice, as I understand the rules, if the work was substantially completed before the end of 2009 then it is still appropriate to charge 15% VAT rather than 17.5% even thought eh invoice is dated later.

The changes in the rates cause problems with solicitors' computer systems and they probably altered theirs so that all bills produced from the start of 2010 had VAT at 17.5% - so they will have to make a manual adjustment - so I would ask them to do that.

They probably should have raised an invoice in 2009. And then another for any subsequent costs in 2010.

shaz77_2

I communicated with my solicitor via email, I thanked him for all the work he has done and I explained my issue and would he review it.

He has agreed to reduce my fee by 2.5% which I am pleased about.

Thanks to everyone for their help and please also be aware of this issue for those in a similar situation.