I am advised by the Revenue Commissioners that section 76 of the Finance Act 1982 inserted a new subsection (4A) in section 5 of the Value-Added Tax Act 1972. The measure dealt with the VAT treatment of the supply of services by barristers. When a barrister supplies a service he or she is not legally entitled to receive a fee in respect of that supply, even though appropriate steps may be taken at the time to secure payment. Accordingly, for VAT purposes, no part of the fee charged to the client may be regarded as consideration, which the barrister "becomes entitled to receive" in accordance with section 10(1) of the Value-Added Tax Act 1972, and no liability to tax arises by virtue only of the supply of the service.
Thus, section 5(4A) of the Value-Added Tax Act 1972 provides that a barrister's service is deemed to take place for VAT purposes when the consideration for the service is paid to him or her. Accordingly, a barrister will have no liability to VAT until he or she has both supplied a service and has been paid in respect of that supply. Also, the obligation to issue an invoice for the supply under section 17(1) of that Act does not arise until those two conditions have been fulfilled. In effect, the barrister operates VAT on a cash receipts basis. There is no cost, as such, to this measure, as the barrister must account for VAT when he or she has been paid in respect of a supply.