22 - Taxation Procedure

Summary

Preparation Of Judicial Accounts Of Expenses

It is the responsibility of the entitled party to have an account of expenses prepared in accordance with r. 2.1 of the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019 (the 2019 Rules), which states:

An account of expenses must—

• (a) set out in chronological order all items in respect of which payment is claimed;

• (b) list in separate columns—

  • (i) the charges claimed for work carried out by the entitled party’s solicitor; and

  • (ii) the outlays claimed; and

• (c) include a statement as to whether or not the entitled party will bear the burden of the value added tax referred to in rule 6.1.

Rule 6.1 provides:

• (1) Where work done by a solicitor constitutes a supply of services in respect of which value added tax is chargeable by the solicitor, there may be added to the charges allowed in respect of that work under Chapter 3 an amount equal to the value added tax chargeable on those charges, unless the entitled party will not bear the burden of the value added tax.

• (2) Where an outlay allowed under Chapter 4 is a charge for the supply of goods or services on which the supplier has charged value added tax, the amount of the value added tax charged may only be allowed as an outlay when the entitled party will bear the burden of the value added tax.

The account will therefore normally contain four columns. The left column showing the date of the work, the next column containing a concise narrative of the work undertaken, the next column showing outlays incurred and the fourth column showing fees. The columns for outlays and fees are totalled, VAT – if applicable – is added and a total is shown at the end (see 23.16). The auditor will mark any abatements or additions on the left side of the account. However, it is not normal practice for the auditor to append reasons for any abatements.

Any outlays claimed within the account of expenses require to be supported by suitable vouching presented in chronological order and numbered appropriately to correspond with the relevant item being claimed in the account of expenses.