VAT on Solicitors' Fees

The Law Society has met with the National Consumer Agency (NCA) and has agreed to publish a notice in the Gazette advising solicitors that, under the Prices and Charges (Tax Inclusive Statements) Order 1973 (SI 9 of 1973), charges that are advertised or communicated verbally must be stated as a single amount, inclusive of any charge for VAT.

The NCA has pointed out that advertising a fee plus VAT is not sufficient to comply with the statutory instrument – the VAT inclusive price must be clearly stated.

Despite publicising this requirement in the Gazette, the NCA is aware that certain solicitors’ firms continue to advertise their fees exclusive of VAT. The NCA has asked the Society to assist it in ensuring that the statutory instrument is observed in all cases, and the Society has agreed to take whatever steps are appropriate in this regard.

The relevant text of the statutory instrument is as follows: “Where, for the purposes of or in connection with the rendering of a service by a person, the charge for the service is stated orally by the person or by a servant or agent of the person or is stated in any catalogue or advertisement or in a notice or other document (other than an invoice), the charge so stated shall be stated as a single amount inclusive of any charge made by the person for any tax payable in respect of the service.”

Solicitors who advertise fixed fees for any legal service are asked to ensure that their advertising complies with the law as set out above.