System changes and guidance in relation to the application of VAT on solicitor and counsel fees and outlays

This guidance is of particular importance to solicitors and counsel who provide legal services to clients who have not been granted a right or permission to remain in the UK

We have published detailed guidance to help you better understand how and when we apply Value Added Tax (VAT) in relation to accounts for work done by solicitors and counsel.

The purpose of the guidance is primarily to draw to your attention on how we will be applying VAT on any accounts which are paid on or after 23 September 2023, where you provide legal services to a client who has not been granted a right or permission to remain in the UK.

Those services are treated as outside the scope of UK VAT and are therefore exempt. This will mostly apply to asylum seekers and those entering the UK without permission.

It is important to emphasise that these changes will not affect how we pay VAT on the overwhelming majority of solicitors or counsels accounts that we receive.

Where you are VAT registered, and provide legal services to a client who has a right to stay in the UK, we will continue to add, at source, VAT to the amount of fees and outlays, where appropriate, that are chargeable in the case.

System changes and guidance

To assist us in our decision making we have made changes to our Applications systems for all new cases made on or after 23 September 2023.

This is so you can provide us with the information that will allow us to determine whether VAT is payable in relation to the legal services that you have provided.

Full details of the system changes and how we will apply VAT on accounts is available in the following guidance:

Legal aid guidance: VAT – how it is applied on legal aid accounts

Legal Aid Online (LAOL) guidance: Understanding VAT on our applications system

More information

For enquiries in relation to our guidance on the application of VAT please contact:

Audrey Crawford, Finance & Procurement Manager, T: 0131 240 2077 E: crawfordau@slab.org.uk

For enquiries on how we will treat VAT on legal aid accounts please contact:

Eileen Grant, Accounts Assessment (Operational Teams) Manager T: 0131 560 2135 E: manager.accounts@slab.org.uk