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Our client was involved in litigation recently. The conclusion was that our client had to pay damages to the other side (£40,000 plus £7,000 VAT),
plus a contribution towards their legal costs (£2,000 plus £350 VAT). As the opponent was not VAT-registered, the costs to them were inclusive of VAT, whereas had our
client been required to incur the expenses, VAT would have been recoverable.
Our client was involved in litigation recently. The conclusion was that our client had to pay damages to the other side (£40 000 plus £7 000 VAT)
plus a contribution towards their legal costs (£2 000 plus £350 VAT). As the opponent was not VAT-registered the costs to them were inclusive of VAT whereas had our
client been required to incur the expenses VAT would have been recoverable.
In the circumstances there is no VAT invoice allowing our client to recover the VAT element to the amount paid just a court order. Is the court order sufficient for our client to claim the input tax? Can anything be done and if not could this situation have been avoided in any way (i.e. if the parties had agreed a settlement along similar lines)?
Readers' views and thoughts are welcomed here.
Query T16...
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