Billing within Law Firms
Speaker: Darren Whelan
Length: 2.5 Hours
Published September 24, 2022
Last Updated on May 1, 2023
Who is this training for?
This on demand workshop is for Solicitors, Lawyers, Accountants, Compliance Officers, COFA’s, Legal Accounts Professionals, Legal Cashiers, Billing Teams, Credit Controllers and anyone that has any involvement in working in legal finance and compliance.
Purpose of this training?
Life is rarely straightforward and when it comes to billing, there are no exceptions. In this online workshop we explain what the solicitors’ bills rules are and why they are important when it comes to the recoverability of the fees, recharges and disbursements claimed in bills. We’ll look at billing procedures and processes, ensuring that VAT is accounted for correctly and at right time in accordance with the VAT Act 1994 and Brexit. It will also look at the different categories of bills that can be issued. Don’t forget, not all bills are equal in the eyes of the law. Unfortunately, the same terminology can be used when labelling and referring to different bills, confusion and misunderstanding can arise when dealing with them, not only on the part of clients but solicitors too.
Time of Supply
- Basic Tax Point
- Actual Tax Point
- Extensions
Sales/Fees
- Time recording
- VAT rates
- Client’s overseas (Place of ‘belonging’)
- Land related services
Third Party Payers
- Indemnity basis
- VAT invoices
Administrative Aspects
- Valid VAT invoices
- Valid credit notes
- Electronic invoices (structured and unstructured formats)
- Layout
- Types of bills – solicitors’ bills rules
- Disbursements and recharges
- VAT Returns
VAT Returns
- Accounting software and VAT rates
- Outputs and Output VAT
- Errors and penalties
#1. You’re acting for an asylum seeker where the client’s right to remain has not yet been granted. The client has now been arrested and is in a UK prison.
When issuing your bill to the client for the immigration work, your services are:
#2. Is it permissible to issue the client with a bill of costs for an unpaid, not yet incurred, court fee?
#3. Your firm is acting for a client and has instructed a translator to translate a document which needs to be produced in Court.
When including the cost of the translator in your bill of costs, you treat it as a:
#4. To be valid for VAT purposes a credit note must be issued within:
#5. You are acting for a business client whose place of belonging is the British Virgin Islands. The client’s claim is for negligence against the client’s previous solicitors in having wrongly drafted the terms of a claim for a Collective Enfranchisement of a UK residential property.
When issuing a bill to the client, what VAT rate do you apply to your supply?
#6. You have instructed an interpreter in order for your client to be able to communicate with you or to enable your client to understand Court proceedings. The cost of the interpreter is being passed on to the client. When billed, the cost is:
#7. You’re acting for VAT registered business client in a litigation matter. Your services were provided to and used by your client. A third party has agreed to pay your client’s legal costs and you have issued the payer with a note of your costs requesting the full amount. The payer has stated that they’re liable for the net amount only and that your client should discharge the VAT amount.
Is the payer correct?
#8. Is it permissible to pass on the costs of conducting client due diligence as a disbursement under the AML under the money laundering regulations on to my client?
#9. Normal VAT Tax Point (time of supply) rules apply to Legal Aid work?
#10. In a contentious case, the VAT tax point will be the date of the invoice, provided the invoice is issued within how long after the work is completed?
Further Information
Accounts & Finance Practice Notes (Subscriber resource only)
Compli-Q – Compliance FAQs (Subscriber resource only)
Disbursement or Recharge Calculator (Subscriber resource only)
Place of Supply VAT Calculator (Subscriber resource only)
VAT Billing Calculator (Subscriber resource only)
VAT Inclusive Calculator (Subscriber resource only)
Practice notes and training sessions represent the Association of Legal Compliance & Accounts’ view of good practice in a particular area. They are not intended to be the only standard of good practice that firms can follow.
Practice notes and training sessions are not legal advice, and do not necessarily provide a defence to complaints of misconduct or poor service. While we have taken care to ensure that they are accurate, up to date and useful, we will not accept any legal liability in relation to them.
Frequently Asked Questions
It’s really simple:
- Reduced cost
- Can be watched anywhere, anytime on any device – no travel time or cost
- Shorter and more efficient than face-to-face
- Recorded and can be replayed at your leisure
Online – the Cons
On Demand is not for everyone one. People learn differently and watching a pre-recorded training video can feel very lonely and isolated. It requires strong, self-motivation and time management skills. There is no opportunity to ask a question and receive an answer straight away as you would with an online or a face-to-face workshop.
No. In order to watch them, you must watch them whilst logged into the website.
