VAT ON LITIGATION

HMRC has clarified its position on the taxation of litigation, potentially leading to additional costs for law firms undertaking defendant work under a delegated-authority scheme. Where a single fee is charged for both pre- and post-litigation services, HMRC's updated guidance says firms will be expected to apportion that fee accordingly. Ian Carpenter, head of VAT at RSM, said this was 'likely to create further uncertainty for law firms and potential disputes with their insurance clients as to how much VAT should be charged.'