VAT will be payable in respect of every supply made pursuant to a legal aid/LSC certificate where:
(i) the legal representative and/or other person making the supply is a taxable person; and
(ii) the legally aided party
(a) belongs in the United Kingdom or another member state of the European Union; and
(b) is a private individual or receives the supply for non-business purposes.
Where the legally aided party belongs outside the European Union, VAT is generally not payable unless the supply relates to land in the United Kingdom.
For the purpose of sub-paragraphs (a) and (b), the place where a person belongs is determined by section 9 of the Value Added Tax Act 1994.
VAT on legal services rendered to a legally aided party is payable out of the legal aid fund even if the legally aided party is registered for VAT and the legal services were supplied in connection with that person’s business.
Any summary of costs payable out of the legal aid fund must be drawn so as to show the total VAT on Counsel’s fees as a separate item from the VAT on other disbursements and the VAT on profit costs. The different calculations of VAT will also be shown separately in any costs certificate payable out of the legal aid fund.