3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

                                                    

I’d better start this piece by declaring an interest in that I can see the Wirral Waters site from where I live as it’s not that far away.

Below are three invoices that however many times I look at them don’t make much sense to me. However maybe through writing about them I can make more sense of them. I may have this wrong, so if I have please leave a comment as elements from one invoice appear on the other ones so maybe I’m not counting things correctly.

All three are from Eversheds LLP (a firm of solicitors) with an office in Manchester. I’ll put them in chronological order:

20/2/13 Interim Invoice | Wirral Waters Section 106 agreement (to November 2012) | £10,000 + VAT £2,000 = £12,000 | £10,000 paid by Peel Land and Property (Ports) Limited | £2,000 paid by Wirral Council (VAT element)

15/4/13 Interim Invoice | Wirral Waters Section 106 agreement (to November 2012) | £8,133.90 + VAT £1,617.58 = £9,751.48 | £8,133.90 paid by Peel Land and Property (Ports) Limited | £1,617.58 to be paid by Wirral Council (VAT element)

29/4/13 Invoice | Wirral Waters Section 106 agreement (28 June 2011 to 31 July 2012) | £8,000 + VAT £1,577.20 = £9.577.20 | £8,000 paid by Peel Land and Property (Ports) Limited | £1,577.20 to be paid by Wirral Council (VAT element)

Total (across three invoices) paid by Peel Land and Property (Ports) Limited: £10,000 + £8,133.90 + £8,000 = £26,133.90
Total (across three invoices) paid by Wirral Council : £2,000 + £1,617.58 + £1,577.20 = £5,194,78

Which leads me to the obvious question about VAT. When a developer such as Peel Land and Property (Ports) Limited have a legal firm (in this case Eversheds) to draw up a section 106 agreement between themselves (Peel Land and Property (Ports) Limited) and Wirral Council, why does Wirral Council pay the VAT?

I’m not an accountant, so maybe somebody out there with a better understanding of the tax code and VAT issues can help me! Please leave a comment if you understand this better than me!

Wirral Waters section 106 agreement interim invoice Wirral Council 20th February 2013 £12000
Wirral Waters section 106 agreement interim invoice Wirral Council 20th February 2013 £12000
Wirral Waters section 106 agreement interim invoice Peel Land and Property (Ports) Limited 15th April 2013 £9751 48p
Wirral Waters section 106 agreement interim invoice Peel Land and Property (Ports) Limited 15th April 2013 £9751 48p
Wirral Waters section 106 agreement invoice Wirral Council 29th April 2013 £9577 20p
Wirral Waters section 106 agreement invoice Wirral Council 29th April 2013 £9577 20p

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Incredible £2,697 spent on legal costs by Wirral Council in dispute with Volker Laser

Incredible £2,697 spent on legal costs by Wirral Council in dispute with Volker Laser

Incredible £2,697 spent on legal costs by Wirral Council in dispute with Volker Laser

                                                               

Wirral Council legal invoices page 19 Volker Laser Eversheds LLP
Wirral Council legal invoices page 19 Volker Laser Eversheds LLP

I’ve erased some of the black boxes on legal invoices of Wirral Council and came across this one for £2,697 in a dispute that Wirral Council had with Volker Laser. Sadly Volker Laser is not the name of a Bond villain’s company but instead a civil engineering firm.

Helpfully on Evershed’s website they tell us the work was for Lucy Frith of Eversheds "defending a series of adjudications arising out of a remediation contract for a public sector employer" (at least that’s a reasonable guess considering it wasn’t any of the other three). So what does this actually mean when translated out of lawyer-speak?

Wirral Council’s Technical Services department contracted Volker Laser to do civil engineering work for them. Wirral Council weren’t happy that the work was done how they wanted, Volker Laser disagreed with this so Wirral Council got their lawyer involved to sort it out. This is only an “interim invoice” so who knows how much that fiasco actually cost the taxpayer in total? No wonder they wanted to black out the name of the contractor involved before releasing the invoice!

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Outrageous 20 Page Wirral Council Contract over Secret Hourly Legal Rates

Outrageous 20 Page Wirral Council Contract over Secret Hourly Legal Rates

Outrageous 20 Page Wirral Council Contract over Secret Hourly Legal Rates

                                                         
Before Bill Norman left Wirral Council’s employment he said during a public meeting that Wirral Council had much less in-house solicitors than the previous Council that had previously employed him. Currently Wirral Council has sixteen fifteen people in-house to give legal advice (David Abraham, Ali Noman Bayatti, Louise Kate Bragg, Gregory Oghenebrume Eyitene, Angela Mary Green, Colin John Bennett Hughes, Victoria Michelle Leece, Rosemary Ann Lyon, Elizabeth Macgregor, Anne Frances Quirk, Cecilia Mary Rathe, Sally Jayne Rotherham, Joanne Elizabeth Rutherford, Lucy Victoria Shaw, Surjit Tour and Karen Christina White).

As a result of having more legal work than people employed to do it, work gets outsourced. Some of this is through the North West Legal Consortium that have a website here. Basically it’s a collaboration between a number of local Councils and others (such as Merseytravel, The Office for the Police and Crime Commissioner for Merseyside and The Office for the Police and Crime Commissioner for Lancashire) for legal services from firms such as Weightmans LLP and Eversheds LLP. The “outrageous” clause in my opinion in the contract is this though:-

17. Confidentiality

The Consortium has entered into agreement with Solicitors Firms and Barristers Chambers in relation to discounted fee rates. Each of these rates is commercially confidential to that Firm or Chambers and as such should not, without the prior written consent of that Firm or Chambers be disclosed to any other Firm or Chambers or any other third party outside of the Consortium. Authorities should use reasonable endeavours to ensure either by themselves their servants or agents that they treat such Confidential Information as confidential and safeguard it accordingly; and they hereby agree to use reasonable endeavours not disclose such Confidential Information to any other person without the Solicitors Firm or Chambers prior consent.

What this means is that they can charge a three figure sum an hour for legal advice and despite the public’s right to inspect these documents and make copies (without redactions) Wirral Council will just black box out the amounts on for example this Weightmans table of prices here and here.

With this level of redaction (which extends to the invoices themselves too), how can the Wirral public know they’re getting value for money at these “discounted fee rates”? What’s the rate they’re classed as discounted from anyway? Links to the whole North West Legal Consortium contract are provided below.

North West Legal Consortium Collaboration Agreement Page 1
North West Legal Consortium Collaboration Agreement Page 2
North West Legal Consortium Collaboration Agreement Page 3
North West Legal Consortium Collaboration Agreement Page 4
North West Legal Consortium Collaboration Agreement Page 5
North West Legal Consortium Collaboration Agreement Page 6
North West Legal Consortium Collaboration Agreement Page 7
North West Legal Consortium Collaboration Agreement Page 8
North West Legal Consortium Collaboration Agreement Page 9
North West Legal Consortium Collaboration Agreement Page 10
North West Legal Consortium Collaboration Agreement Page 11
North West Legal Consortium Collaboration Agreement Page 12
North West Legal Consortium Collaboration Agreement Page 13
North West Legal Consortium Collaboration Agreement Page 14
North West Legal Consortium Collaboration Agreement Page 15
North West Legal Consortium Collaboration Agreement Page 16
North West Legal Consortium Collaboration Agreement Page 17
North West Legal Consortium Collaboration Agreement Page 18
North West Legal Consortium Collaboration Agreement Page 19
North West Legal Consortium Collaboration Agreement Page 20