That’s what friends are for

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‘A doctor and a lawyer were talking at a party. Their conversation was constantly interrupted by people describing their ailments and asking the doctor for free medical advice.

After an hour, the exasperated doctor asked the lawyer, ‘What do you do to stop people from asking you for legal advice when you’re out of the office?’

‘I give it to them’ replied the lawyer, ‘and then I send them a bill.’

The next day, when he went to his mailbox, the doctor found a bill from the lawyer.’

As I’m not going to Oz for the Australian Open tennis this year, after Christmas I was definitely in the mood to put my Scrooge hat on and get up to date with the business admin, including billing.  As part of this process I discovered that, in 2011, I did the following free stuff, and more, for friends and acquaintances:

Gave an opinion on VAT and service charges and the liability to provide a VAT invoice in a dispute between landlord and tenant.

Obtained advance assurance from HMRC of the availability of enterprise investment scheme relief for investment in a gym.

Proofread the SDLT and VAT sections of a book on the UK tax aspects of company and business sales.

Gave advice on:

  • how to appeal a Council Tax Benefit recovery assessment
  • whether a business could recover VAT charged by a Turkish travel agent based in the UK on hotel rooms in Turkey
  • the import of bicycles into the UK from Belgium
  • whether you should pay builders in cash
  • the recovery by HMRC of overpaid Child Tax Credit
  • changing SIPPs trustees

While it can be a rewarding experience, giving free advice can often be more stressful than giving advice you charge for, for a couple of reasons.  Firstly, you have to maintain the same professional standards while fitting the work in between the paying stuff. Secondly, advising a person you know well can be tricky.

It’s not that I mind conducting what often seems to be a one-woman campaign to show the human face of the law, nor do I believe that those who are getting free advice should get any lesser quality of legal service than if they were paying top dollar.  That said, the recently decided Court of Appeal case of Padden v Bevan Ashford makes you give serious thought to whether you can any longer afford to undertake work for free.

In his judgment in Padden Lord Neuberger of Abbotsbury emphasised that just because advice was free did not relieve a firm from the responsibility of giving full advice.  He was of the view that the firm’s duty was no different from what it would have been if they had charged.  In this respect I totally agree but having to get a friend for whom you are doing free work to sign up to the full client care package and anti-money-laundering checks required by the Solicitors Regulation Authority does seem a little extreme.

Perhaps I’m not a stereotypical lawyer.  Or maybe I am.

You know who you are.  You’d better rush off and check your mail.

Tax lawyer specialising in business tax, SDLT and VAT

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