Solicitors fees and VAT

Roubled

If a solicitor quotes a price for work or an hourly rate can they then charge VAT on top when presenting the bill? In ringing round for prices I've noticed some mention the price is [] plus VAT. However most don't and only mention it when asked. So if a solicitor says the price will be €1000, does the work and then sends a bill for €1450.00 can one refuse to pay the extra on top. The bill would be for work carried out for an individual member of the public who can't claim VAT back and not for a business.

Overall I think solicitors do themselves a disservice by engaging in this practice of quoting a price minus VAT. It's like they were learning business tactics from Ryanair.

Pat Mustard

Roubled wrote: »

Overall I think solicitors do themselves a disservice by engaging in this practice of quoting a price minus VAT. It's like they were learning business tactics from Ryanair.

Solicitors do not quote ex VAT, overall.

Most solicitors tend to include VAT in quotes.

Roubled

The Mustard wrote: »

Solicitors do not quote ex VAT, overall.

Most solicitors tend to include VAT in quotes.

Last year when getting quotes for conveyancing I had 5 out of six solicitors give me a quote without mentioning the VAT. This was generally on the first inquiry.

Pat Mustard

Roubled wrote: »

Last year when getting quotes for conveyancing I had 5 out of six solicitors give me a quote without mentioning the VAT. This was generally on the first inquiry.

May I ask if these were verbal quotes over the phone? Solicitors are required to give written fee estimates when they agree to take on work so they usually cover the necessary elements, to include outlays, stamp duty and VAT at that stage.

Roubled

The Mustard wrote: »

May I ask if these were verbal quotes over the phone? Solicitors are required to give written fee estimates when they agree to take on work so they usually cover the necessary elements, to include outlays, stamp duty and VAT at that stage.

Two of them were face to face after quoting without mentioning the Vat over the phone. They didn't offer to provide them in writing. Maybe they'd only do that if you agreed to hire them. The others were just phone quotes.

MarkAnthony

The ones I tried quote verbally ex VAT. However one would be expected to read the engagement letter (via snail mail :P ) very carefully when it arrives.

On a seperate rant aren't they prevented from quoteing ex vat prices even verbally, legally. Can't recall the SI now but it's from the 70's IIRC and concerns prices quoted to consumers.

Roubled

MarkAnthony wrote: »

The ones I tried quote verbally ex VAT. However one would be expected to read the engagement letter (via snail mail :P ) very carefully when it arrives.

On a seperate rant aren't they prevented from quoteing ex vat prices even verbally, legally. Can't recall the SI now but it's from the 70's IIRC and concerns prices quoted to consumers.

I would have to think there is nothing to prevent quoting prices ex-vat on the basis of how often I've gotten quotes that way.

One quote (for something else) which was only verbal led me to believe the total price was €600. When the bill arrived it was €738 (with vat of €138). The solicitor claimed he had said €600 plus vat when he quoted the price in his office. Having been told, rightly or wrongly, by a number of people that the profession (law society/taxing master) would always side with their own, I had no choice but to pay it. There was nothing on paper.

MarkAnthony

They won't side with their own if they weren't engaged properly which requires an agreement in writing.

Roubled

MarkAnthony wrote: »

They won't side with their own if they weren't engaged properly which requires an agreement in writing.

Thanks. I might follow it up. In the course of looking for a solicitor at least two gave me opinions that were patently wrong. The one I did pay spent a good portion of the fees sending letters to the other side for something that I could have had for free just by walking into the relevant government department and bringing ID.

Pat Mustard

Roubled wrote: »

Thanks. I might follow it up. In od the course of looking for a solicitor at least two gave me opinions that were patently wrong. The one I did pay spent a good portion of the fees sending letters to the other side for something that I could have had for free just by walking into the relevant government department and bringing ID.

Can happen. Good advice is often not cheap. Cheap advice often isn't good. There's no point looking for advice from solicitors that you can get elsewhere either. But if you want to pay for easily obtained advice, there will always be people who will take your money. Hardly any point complaining about it afterwards.

Roubled

The Mustard wrote: »

Can happen. Good advice is often not cheap. Cheap advice often isn't good. There's no point looking for advice from solicitors that you can get elsewhere either. But if you want to pay for easily obtained advice, there will always be people who will take your money. Hardly any point complaining about it afterwards.

It's true what you say. It's a jungle out there! I've since found a letter from the solicitor. At the bottom of the fourth page it says "as stated I charge €200 per hour". It does not say anything about VAT but on the bill it was added on.

MarkAnthony

The Mustard wrote: »

Can happen. Good advice is often not cheap. Cheap advice often isn't good. There's no point looking for advice from solicitors that you can get elsewhere either. But if you want to pay for easily obtained advice, there will always be people who will take your money. Hardly any point complaining about it afterwards.

While I completely agree and it's expedient in 99.9% of cases for the solicitor to request documentation rather than request the client do it and then try and sort out the ensuing mess I was very impressed recently with a small firm in D5 handling my house purchase.

I was told that one aspect (post-sale issue) could be done by me without issue and much more cheaply, despite this I was insisting I'd get the solicitor to do it. He said he'd be more than happy but I should go and look at it, which I did and realised I, and/or a chimp, could do it. I'm dubious that this would happen in every case. That said as we all know very builder, plumber, electrician, cabbie and mechanic is an absolute saint who wouldn't charge a penny more for something than the punter needed to spend.

nuac

MarkAnthony wrote: »

The ones I tried quote verbally ex VAT. However one would be expected to read the engagement letter (via snail mail :P ) very carefully when it arrives.

On a seperate rant aren't they prevented from quoteing ex vat prices even verbally, legally. Can't recall the SI now but it's from the 70's IIRC and concerns prices quoted to consumers.

Relying on memory, but I think it was c 1982 before legal fees were vatable

Pat Mustard

Roubled wrote: »

It's true what you say. It's a jungle out there! I've since found a letter from the solicitor. At the bottom of the fourth page it says "as stated I charge €200 per hour". It does not say anything about VAT but on the bill it was added on.

I think that there is a piece of legislation which covers the issue of whether VAT should be mentioned or not. Without being able to put my finger on that at the moment, I would think that best practise should be that VAT should be quoted. Some startup practices may not be registered for VAT and may not have to charge it.

Bar those few startup practices, I don't know of any solicitors who don't explicitly mention VAT in their quotes.

Can't give legal advice as you know but there is a right to refer any solicitor's bill of costs for Taxation of Costs.

MarkAnthony

nuac wrote: »

Relying on memory, but I think it was c 1982 before legal fees were vatable

This was what I was thinking of:

S.I. No. 9/1973:

PRICES AND CHARGES (TAX-INCLUSIVE STATEMENTS) ORDER, 1973.

PRICES AND CHARGES (TAX-INCLUSIVE STATEMENTS) ORDER, 1973.

I, PATRICK J. LALOR, Minister for Industry and Commerce, in exercise of the powers conferred on me by section 19 (2) (a) of the Prices Act, 1958 (No. 4 of 1958), as amended by the Prices (Amendment) Act, 1972 (No. 20 of 1972), hereby order as follows:

1. This Order may be cited as the Prices and Charges (Tax-inclusive Statements) Order, 1973.

2. This Order shall come into operation on the 1st day of February, 1973.

3. Where, for the purposes of or in connection with the sale by retail by a person of a commodity, the retail price of the commodity is stated orally by the person or by a servant or agent of the person or is stated on the commodity or on any container or wrapper in which the commodity is packed or on a ticket or label attached to the commodity or to such container or wrapper or in a catalogue or advertisement or in a notice or other document (other than an invoice), the price 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 commodity.

4. 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.

GIVEN under my Official Seal this 15th day of January, 1973.

PATRICK J. LALOR,

Minister for Industry and Commerce.

EXPLANATORY NOTE.

This Order requires that all retail prices marked on goods or prices displayed or quoted at the retail level and all charges for services displayed or quoted should be tax-inclusive.

Pat Mustard

That's probably the one, MarkAnthony. Thanks for that.

Uno my Uno.

As far as I am aware the practice is always to quote professional fees ex VAT and state that they are ex VAT and are vatable at whatever the Rate of VAT is, ie 23%.

It's useful in my opinion as it makes clear to the client the actual fees they are paying as distinct from VAT and outlays. Consumers may find "all in" figures easier to deal with but that doesn't necessarily make them the best option, even from a consumer based perspective.

Pat Mustard

What is usually done when quoting is (for example) "2500 euros plus VAT".

A section 68 letter/written quote will have a stated amount for VAT.

Roubled

The Mustard wrote: »

What is usually done when quoting is (for example) "2500 euros plus VAT".

A section 68 letter/written quote will have a stated amount for VAT.

I checked back and at the bottom of the letter it gave the fee per hour and a total with no mention of vat. The attached invoice, which I didn't look at, did mention VAT. I was given the impression I was being charged €200 per hour total when I was actually being charged €200 plus VAT.