Prior to Brexit, our supplies of legal services to EU non-business clients were subject to UK VAT under the normal rules. For example, if we were advising a French resident individual on their personal matters, we were obliged to charge our fees subject to VAT at 20%.
Now that the UK has left the EU and the transition period is over, from 1 January 2021, ordinarily, our supplies of legal services to overseas non-business clients should no longer be subject to such VAT, unless they directly relate to UK land or property. This applies to both EU and non-EU non-business clients alike.
Therefore, if we were to advise the French resident individual in the example noted above at the time of writing, we would no longer charge VAT on our fees.
Interpretation of the relevant terms above (such as "non-business" and "directly land-related") will depend on the facts of each case. By and large, this change should represent an advantageous 20% saving for many of our relevant overseas private clients.