As a lawyer you will know the importance of specialist advice, after all it’s what you offer. But what about when you need advice? VAT is one of the most complex aspects of UK taxation and an area where it will really pay to use a specialist accountant for lawyers who understands your business and the VAT implications.
What is VAT?
You probably don’t need an accountant to tell you what VAT — Value Added Tax — is, you know it when you see it! But looking at it more technically, it is an incremental tax, meaning that it is at every stage in the production or delivery of a service.
The paper you use for a letter, for example, will be part of a long trail of VAT payments and claims. From whoever grew the trees, pulped the wood, made the paper, sold it to the retailer, then sold it to you, there will be businesses claiming back the VAT they have paid and collecting VAT from their sales on behalf of the government.
The complexities for lawyers
Even when it’s straightforward, VAT is fiendishly complex and comes with a significant administrative overhead as you calculate and submit your regular returns. Unfortunately, VAT is rarely entirely straightforward. Which is why it’s sensible to use a specialist accountant for lawyers.
Do you have any purchases that are partially exempt, for example? For example, if you have a home office you might have equipment that you use for the business and personally, where you can’t claim the full amount of VAT back.
Or are you providing services to clients in other countries? In this case you might not have to charge VAT on your services (something that has got much more complex since the advent of Brexit). And if you don’t, what implication does this have on your claim for input tax?
Reporting and returns
All this complexity is not helped by the rigorous cycle of VAT returns the tax-man demands. From the quality returns to the annual adjustment keeping HMRC up to date with your VAT situation is an onerous duty.
It’s made more complicated by the rules around making claims if you’ve overpaid. It’s important to have detailed audits, so you can spot these, but even then it’s not always possible to make a claim — the tax-man isn’t renowned for making it easy to get your cash back.
Using a specialist
We are specialist accountants for solicitors and barristers who know how you work and how VAT works. We can combine that knowledge to make sure your VAT affairs are in order, ensuring that you meet all the deadlines and requirements for your financial obligations. Using a specialist accountant for lawyers means that you can leave the worrying about your financial and VAT affairs to us, so you can concentrate on providing legal services to your clients. Our team is always available to offer advice, so get in touch to find out how we can help you with your VAT, and any other financial matters.
Read about our services here.