Reclaiming VAT on solicitor invoice

Formosa

Registered User
Messages
24
I have some invoices from my solicitor on which I want to reclaim the VAT.
They have "This is not a VAT invoice" accross the top...can I claim the VAT back on these now or should I strictly wait until I get a "proper" invoice (which I'm sure won't be issued until I pay them)
 
You can only reclaim the VAT when you receive a valid VAT invoice. The solicitor will probably only issue that when you pay him/her.
If you try reclaim it now, you'd get into some trouble if a Revenue official carries out a VAT inspection.
BTW, the solicitor is using a fairly common cash-flow trick. Normally s/he should account for VAT on sales on an invoice issued basis ie when the invoice is ISSUED rather than when it is PAID. This imposes a cash flow burden on traders faced with slow payers as they have to pay the VAT to the Revenue even though they haven't received the cash from the client.
By doing this 'not-a-valid-invoice' way, s/he defers issuing the valid invoice/ accounting for VAT until the cash is received, effectively accounting for the VAT on a cash receipts basis rather than an invoice issued basis.
 
 
Graham_07: You are correct re the criteria for accounting for VAT on a cash receipts basis although I think (not sure) that the €635K threshold may have been updated recently.
I assumed, however, that the solicitor in the original post must be accounting for VAT on an invoice issued basis as I see no apparent reason to issue a non-valid VAT invoice if s/he could avail of the cash basis