Marbrow v Sharpes Garden Services Ltd  EWHC B26 (Costs)
Senior Costs Judge Gordon- Saker sitting in the SCCO has confirmed that the fees in Para 7.2 of CPR PD 3E are exclusive of VAT. The Practice Direction states:
Save in exceptional circumstances—
(a) the recoverable costs of initially completing Precedent H shall not exceed the higher of £1,000 or 1% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted costs (agreed or approved); and
(b) all other recoverable costs of the budgeting and costs management process shall not exceed 2% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted (agreed or approved) costs.
Master Judge Gordon- Saker felt that as the figures included in the Budget were all expressed as being exclusive of VAT that this was the costs of Budgeting/ Costs Management ought to be interpreted consistently. He also noted that cap on costs of provisional assessment of £1,500 has already been confirmed by the rules committee to be exclusive of VAT although this is not specifically stated in the rules. Furthermore he notes that:
“To my mind the caps provided by paragraph 7.2 cannot include value added tax because they are expressed as percentages of figures which do not include value added tax.”
“All of the figures set out in a budget exclude value added tax – as Precedent H makes clear. 2% of £100,000 excluding value added tax, would be £2,000 excluding value added tax.”