VIT13850 - VAT Input Tax basics: special accounting methods for barristers in chambers
HMRC staff should contact Deductions and Financial Services Team before issuing any assessments for breach of the rules.
Method 1
The nominated member to whom the invoice has been addressed treats the full amount of tax as input tax. Output tax is accounted for on the shares charged out to all the other members of chambers. Registered members are entitled to deduct the tax charged as their input tax.
As a concession tax invoices need not be issued by the nominated member. However, it will be necessary for each member’s record to be cross referenced to:
- output tax charged by the nominated member;
- the input tax deducted by other members; and
- the original tax invoice.
The records of all members of chambers must be available during a visit to any one of them.
Method 2
The nominated member to whom the invoice has been addressed does not charge output tax on the member’s contributions. The input tax on the supply is apportioned so that registered members may deduct it on the basis of their own contributions. Records must be kept of the apportionment of input tax between the members of chambers.
Each member’s records should cross-reference the input tax deducted to the tax invoice. This is to ensure that no more than the total tax stated on the invoice has been deducted. The records of all members of chambers must be available during a visit to any one of them.
Method 3
The nominated member to whom the invoice has been addressed deducts the whole amount of input tax. They also pay an equal amount into the common fund. This method may only be used when all members of chambers are registered for VAT.