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. A ‘Statement of Costs On Account’ bill is:
#2. You’ve taken a debit card payment from a client for money on account of search fees. The card used is for a personal bank account. A partner of your firm would like to recharge the costs incurred in taking the card payment on to the client.
Is it permissible to pass the costs of taking the card payment on to the client?
#3. Your firm deals with estate matters and you incur and pay for probate court fees. You also pay for additional copies of the grant of probate. These copies are often sent out to third parties in order to speed up process. You pass the cost of the additional copies on to the estate.
How should you show them and treat them on your bill/invoice?
#4. You’re acting for a client in respect of their divorce. The client is a US Forces personnel living in England on a three year term of duty. The client has a permanent address in the US.
Are your services subject to output VAT?
#5. 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?
#6. Your firm is acting for a client. The case is a criminal matter. The fee earner instructs a specialist to produce video copies of CCTV footage where the action is slowed down, hard copies of individual frames and enhanced/enlarged sections of images are produced. The cost of this service is being passed on to the client.
When billed, the cost is a:
#7. Your firm is acting for a client and has instructed a process server to serve legal documents to a third party.
When including the cost of the process server in your bill of costs, you treat it as a:
#8. You are acting for a client whose place of belonging is Guernsey and they are making a claim through the UK courts against a water provider for damages on a London property arising from water ingress which the client claims the provider is liable for.
When issuing a bill to the client, what VAT rate do you apply to your supply?
#9. 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?
#10. What is the Tax Point date of a Credit Note?
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.
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