Some Solicitors charge VAT on top of 25% success fee deduction – is this legal?
It seems a handful of personal injury solicitors firms are charging their clients VAT on top of the 25% success fee, therefore increasing the success fee to 30%.
This is illegal. The Explanatory Note to The Conditional Fee Agreements Order 2013 states any success fee must be inclusive of VAT.
[shoutout]
If your solicitor charged you VAT on top of the success fee then this writer’s view is that you are entitled to not only that extra 5% back but there is an argument you would actually be entitled to the other 25% back as the agreement would have been unlawful, and unlawful agreements are not legally enforceable.
In personal injury cases the 25% success fee must include VAT and any barrister’s success fees as well, so the maximum a client can be charged is 25% of their compensation.
If you have any queries about this please feel free to contact us on 0161 399 1231 or info@astonknightsolicitors.co.uk.
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