VAT is a tax your clients meet constantly — on their sales, their purchases, their premises and their professional fees. As a solicitor advising a business, you need to know when a client must register, how much they hand over to HMRC, when they can claw VAT back on costs, and the special traps that catch property deals and certain expenses. Getting this right keeps a client compliant and protects their cash flow; getting it wrong is an avoidable and expensive mistake.
This lesson builds your understanding from the ground up:
- Nature and Scope of VAT — what VAT is, how it flows through the supply chain, and the four elements that bring a supply within its scope.
- Categories of Supply — standard-rated, reduced-rated, zero-rated and exempt, and why the difference matters for recovery.
- Taxable Person and Registration — the threshold, the historic and future tests, and voluntary registration.
- Calculating the VAT Position and Recovery of Input VAT — working out the net figure, partial exemption, residual input VAT and the de minimis rule.
- Blocked Input VAT — entertainment and motor cars, where recovery is denied.
- Land, Buildings and the Option to Tax — the default exemption and how the option to tax changes it.
- Compliance Obligations — the deadline for filing and paying.