​

​

​

Special Tax Point Rules

​

​

​

There are special tax point rules for supplies made by barristers and advocates. These are provided for in regulation 92 of the Value Added Tax Regulations 1995 (SI 1995/2518). The rules were established as the result of discussions with the Bar Council and the Faculty of Advocates.

​

​

​

​

Tax Point Definition

​

​

A tax point is the time at which the law treats a supply of goods or services as having taken place. VAT-registered businesses must normally account for VAT in the tax period in which the tax point occurs and at the rate of VAT that’s in force during that period.

​

​

​

 

Tax Point for Barristers and Advocates

​

​

​

The tax point for barristers and advocates is the earlier of:

​

​

​

• The receipt of professional fees for those services

• Issue a VAT invoice for those professional services

• Cease to practice as a barrister or advocate ( VAT becomes due on the date you cease to practice)

​

​

​

Managing Common Expenses in Shared Chambers

​

​

​

Common expenses incurred for equipment, office expenses and premises will usually be apportioned between members of a chamber on an agreed basis.  Invoices for common expenses are made out to the head of

 

chambers or a nominated member.

​

​

​

There are a number of methods prescribed  by HMRC to manage this process for VAT reporting as follows:

​

​

 

 

Method 1

​

​

​

Invoices issued to the Head of Chambers or the Nominated Member will treat the input VAT incurred as their own and onward charge these costs to each member in the agreed portions and including output VAT on the costs. The Nominated member will then be responsible for accounting for the total output VAT on the total amounts recharged. 

​

Members of the Chambers who are registered for VAT will then be able to recover the input VAT charged by the nominated member.

​

As a concession, the nominated member need not issue tax invoices for these supplies. However, there must be a system which allows for each member’s record to be cross-referenced to:

 

• Output tax charged by the nominated member

• The input tax deducted by other members

• The original tax invoice

​

This will help to make sure that no more than the total VAT stated on the original invoice is claimed back.

​

Method 2

​

The nominated member (who the invoice has been addressed to) will not charge Output VAT to the other members of the chambers (as in method 1) but allocate the Input VAT to the members who can then recover their portion of input VAT if they are VAT Registered. 

​

Records must be kept of the apportionment of input tax between the members. Each member’s records should cross-reference the input tax claimed back to the tax invoice.

​

Method 3

​

The nominated member (who the invoice has been addressed to) recovers the VAT and then pays an equal amount into the common fund.

​

This method may only be used when all members of chambers are registered for VAT.

​

Barristers or advocates who use the Flat Rate Scheme 

 

Barristers are not normally entitled to claim input tax. Instead, they calculate and pay a flat rate percentage of their total taxable turnover.

Special accounting rules apply to barristers or advocates:

​

• Who are on the Flat Rate Scheme

• Whose chambers use method 3 (read paragraph 6.3)

​

​

​

-Contains public sector information licensed under the Open Government Licence v3.0.

​

​

​​