The Court considered two items of expenditure by a solicitor on his own travel expenses. In one case the expenditure related to travel to a Crown Court in connection with the defence of a client; in the other the expenditure was incurred in travelling to Rotterdam in connection with the sale of shares by a client.
Held: In neither case did the expenditure constitute a disbursement made on behalf of the clients. Wien J, adopting the VAT tribunal’s views, said: ‘In our view that supply consisted of what we may comprehensively call the legal services rendered by the appellants in connection with the proposed sale, some of which had to be rendered in Rotterdam and could only be so rendered if a member of the firm travelled there for the purpose. He concluded that the nature of the services provided by the solicitor necessarily involved expenditure on travel tickets, which was a cost component of his services, saying that the expenditure was ‘something which is not strictly a payment that the client has asked for, either expressly or impliedly, but is part of the whole legal services rendered by the solicitor for which there is a consideration’.
Bridge J, concurring, identified a class of cases ‘where the goods or services purchased are supplied to the solicitor, as here in the form of travel tickets, to enable him effectively to perform the service supplied to his client, in this case to travel to the place where the solicitor’s service is required to be performed. In such case, in whatever form the solicitor recovers such expenditure from his client, whether as a separately itemised expense or as part of an inclusive overall fee, value added tax is payable because the payment is part of the consideration which the client pays for the service supplied by the solicitor.’
Judges:
Bridge J, Wien J, Eveleigh J
Citations:
[1975] STC 340
Cited by:
Cited – Barratt, Goff and Tomlinson and The Law Society As Intervenor v Revenue and Customs FTTTx 20-Jan-2011
FTTTx VAT – disbursements – whether fees paid for medical records and medico-legal reports by solicitors acting for clients in personal injury and medical negligence claims disbursements and thus outside scope of . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Costs, VAT
Updated: 11 May 2022; Ref: scu.463690