We used a loss assessor to handle a household insurance claim for us. The fees agreed at the start were 10% of the eventual payout + expenses, which I believe to be fairly standard. However, having just sent us a statement, he's not only charged us the 10% & expenses, but 17.5% VAT on top.

Is this correct? That effectively makes it a 27.5% fee - not the 10% I was expecting them to take!

Hello there. Maths isn't my strong point, heaven knows, but has he charged you 17.5% of the eventual payout or 17.5% of his fees plus or minus expenses? That may not add up to 27.5%.

HB

Hi

The assessor should have been regulated by the FSA and should have therefore been required to have specified that the fees were 10% plus VAT at the outset. Our terms of business state that our fees are plus VAT but we also generally send out a letter to our clients when we issue the terms of business making it quite clear that the fees are the agreed percentage (which varies with the size/complexity of the claim) plus VAT

If we omitted to advise a client that our fee was indeed 10% plus VAT I feel that we would be limited to recovering 10% of the claim and we would have to amend our invoice to total 10% including VAT.

If they did not specify the fact that the fee rate was plus VAT I suggest that you advise them of the above and pay them 10%, letting them do whatever they consider necessary re the VAT. Anyone reasonable would just deal with inhouse and get on with their other cases!! If they have got you to sign a mandate authorising your insurers to pay them so that they can deduct the fee before they send you your money and they keep the VAT just complain to the FSA about them.

Hope its not our company that have made this mistake!!

Dear WhizzKid

Your Loss assessor will have agreed a fee with you of 10%.

VaT is chargeable on that 10%

Hence that is an equivalent of 11.75% of you total claim.

Hope that help.

TheExpertEngineer