VAT on costs


Produced in partnership with Hartley Foster of Addington Chambers
Practice notes

VAT on costs


Produced in partnership with Hartley Foster of Addington Chambers

Practice notes
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This Practice Note explains the special provisions that pertain to vat in relation to costs that are the subject of either summary or detailed assessment before the High Court. The relevant provisions are in CPR PD 44.

Entitlement to VAT on costs

This is addressed at CPR PD 44, para 2.3–CPR PD 44, para 2.6.

The party seeking to recover its costs is responsible for ensuring that VAT is only claimed if, and to the extent that, it is unable to recover from HMRC the VAT that is has incurred (CPR PD 44, para 2.4). Where the party can:

  1. •

    recover the VAT from HMRC, it should not be included in a claim for costs

  2. •

    recover a proportion of the VAT from HMRC, only that proportion which is not recoverable from HMRC should be included in the claim for costs

The VAT registration number of the legal adviser must appear in a prominent place at the head of every statement, bill of costs, fee sheet, account or voucher on which VAT is included as part

Hartley Foster
Hartley Foster

Barrister, Addington Chambers

Hartley has specialised in contentious tax matters for over 20 years. During that time, he has acted on over 60 reported cases, including 4 House of Lords / Supreme Court cases and 5 references to the CJEU. He focuses on the technical and tactical management of enquiries by HMRC; and he uses his litigious experience to negotiate with and pressurise HMRC into conceding issues and agreeing settlements. His experience also includes setting up and managing Group Litigation Orders.
Hartley is a regular conference speaker and contributor to a number of publications; he writes and speaks particularly on the tax appeals system and international tax law. He is regularly asked by the media to comment on tax matters, with his comments having been published in many newspapers and a number of trade publications. Hartley regularly writes in tax periodicals, particularly Tax Journal (for which he has written over 30 articles).

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Jurisdiction(s):
United Kingdom
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Key definition:
VAT definition
What does VAT mean?

Value Added Tax (VAT) is a tax charged on most goods and services when a VAT-registered business sells to either another business or to a non-business customer.

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