AIBU Regarding VAT on Lawyers Billing(22 Posts)
My not so d h left me for a younger woman and I have had a long fight on my hands to sort out our finances.
AIBU to think that paying VAT on legal fees is unfair ?
I have had to bring up dc single handed and work full time while trying to get an equitable settlement .
Latest bill has arrived with £226.60 VAT on top of a bill of £1133.00 legal fees.
Basically after being taxed on my income I am being taxed again for something I need to pay in order to keep a roof over our heads .
Since I had no choice in the ending of my marriage and am working as hard as I can to pay bills ,how is this fair to women in my position ?
Sadly, that's VAT for you.
We have to pay VAT on all sorts of goods and services and your own circumstance doesn't really come into it.
I know that sounds unsympathetic, but it's the truth. Unemployed people still have to pay VAT, so do disabled people. There's no mitigation.
Erm... that's the law! If you earn over £85K you must register for VAT... and pay it.
All services are included in this... what you are asking is that, because of your own circumstances, you are gifted a 20% discount on services you receive, no business can afford that.
By all means campaign against VAT registration as a whole, but that won't get you anywhere, well, maybe more angry, annoyed, irritated than you already are.
Instead of railing against something that is pretty much universally applied, focus on enjoying your new and hard won freedom.
Not sure I managed to word that well, short version - stop banging your head against a brick wall, enjoy your new life. Good luck.
Everyone has to pay VAT on VATable goods and services. Everyone gets taxed again on purchases.
It will always be either at 20% or at 5% for reduced rate goods, so at least it's a known quantity.
I'm sorry that you're struggling though. It sounds like you're on a path to a new life and I hope things are brighter for your soon.
There are some VAT reductions for things like food, children's clothes and housing - basic needs but on the whole it's a moneymaker for governments and it is bourne by people and also by some businesses that can't claim it back like insurance and financial services businesses. I'm sorry for you. I hope you've managed to get what you and your dc deserve.
You also pay VAT on clothes, furniture, electronics etc, fuel duty on petrol. Hell you pay VAT on tampons ffs! Now that is ridiculous.
But taxes on goods and services are part of living in society. so YABU
I do think fees should be quoted including VAT though, which would make it feel less of an “extra”
It's very frustrating but they are legally obligated to charge for VAT because they are VAT-registered.
My advice to you is to communicate with them extremely efficiently and sparsely. If you email make it really clear what you want-are saying - use bullet points and headings. The longer they spend reading your email the more they'll charge.
Do not use them as therapists. Real therapists are cheaper.
Make sure they're giving you regular cost estimates.
Ask for an itemized bill (where they've noted down their 6 minute increments of billing) and see if there is anything that looks like it's taken too long/inappropriate and ask for it to be discounted.
The divorce process is hell for anyone without legal training.
*e.g. if you see they've have billed you for time spent on "research" but yours is a straightforward divorce case you can dispute that. You're paying them for their expertise so they shouldn't be billing you for things they don't know.
How about having your car's oil changed.
My garage tells me there's a government fee, effectively a tax, on disposal of the old oil. Thus out of taxed income I pay a disposal tax and then VAT on the disposal tax (on the whole bill). The mechanic and I have had long discussions about this, but, while agreeing it stinks, he assures me that his accountant says it's correct. Triple tax on that money.
“How is this fair to people in this position”
Keep your emails very succinct
Research yourself as much as possible
If you meet, don’t chat about weather etc, get straight down to it and come prepared
You’ll save significantly
Unfortunately even poor people have to pay VAT.
We all have to pay VAT on just about everything we buy.
Were you unaware of VAT in general?
You are paying on most things that you buy, easier to just look at the total cost and not worry about how it's made up. Did the white not include the vat, that would be wrong
Had to pay stamp duty on my ex’s share of my house when I bought him out. Effectively stamp duty on my own house that I’d already paid stamp duty on when I bought it. Kicker was that it’s only payable if you’re not married (which we weren’t). Complained to my MP and asked her if she’d campaign as I felt it was unfair, response was no as the government can’t afford to be reducing their tax income. And I paid vat on the legal services. They get you every way they can!
Another good tip for minimising your legal bills is to save your questions for one big email rather than several small ones. If your lawyer sends you 5 separate emails each taking 2 minutes to write then, because of the 6 minute billing increments, you’ll pay for 35 minutes of work which actually only took 10. But if they write you one ten minute email addressing all of your questions, you’ll only pay for 12 minutes of advice.
Also, telephone calls are usually quicker (and therefore cheaper) than email correspondence.
If you can negotiate a fixed fee arrangement even better!
You already pay VAT on most things, you just don't normally get a VAT receipt unless you ask for one, or pay attention to the items marks with a symbol to indicate the VAT rate.
You pay VAT on chocolate biscuits, so...
It's in indirect tax - it doesn't care who bears it - unlike your income tax which is a direct tax based on your specific circumstances.
If you have your car fixed you pay VAT.
If you have boiler fixed you pay VAT.
Both are unavoidable services but VAT is the law - don't blame your solicitor!!
People's perception that it takes 2 minutes to reply to an email!!!
Sometimes the lawyer does need time to actually consider the implications of what seems like a quick question to you, or look at the file to see whether there are other issues on the file that could impact the answer.
Yes but do be succinct and don't go over things that have already been asked and answered unless you genuinely didn't understand because usually the answer will be the same (and still cost you to get that same answer)>
People's perception that it takes 2 minutes to reply to an email!!!
Bloody hell, Reservoir you don't expect people to pay for expertise do you?
[ponders the need for a smiley face]
My legal bill for divorce came to about 2.5K, but it was sent for 'taxing' to the Lord Chancellor's department (no, I don't know what this means either). Possibly because I qualified for legal aid under the old rules but had to pay the bill as my received settlement exceeded the minimum amount.
Anyway they apparently go through the bill to see if it is reasonable, upshot being it was reduced by £1300 and I got a refund, albeit about 3 years later!
This is a roundabout way of saying that there may be a way to reduce the bill?
I should add I thought the original bill a fair price, my solicitor was great, and the refund was a very lovely surprise!
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