Local Authority Searches & VAT
Updated – 11/02/2016 –
HMRC have agreed to delay adding VAT to Local Authority CON 29 searches until 4th July. The new implementation date also coincides with wider changes to the CON 29 form.
We still don’t know if this means that all Local Authorities will charge from this date but as we get nearer the date we will update you on the developing picture
Local authorities have been advised by HMRC that VAT should be charged on the Con29R and Con29O elements of the Local Authority Search. This is bad news for consumers as the price of Local Authority Searches is likely to increase as a result.
Local authorities are currently being consulted however the expectation is that VAT will have to be charged on the Con29 elements of the LA Search with effect from 01/02/2016.
How Does This Affect Conveyancers?
Local authorities charge separately for the LLC1 and Con29 parts of the LA Search. Under the new proposals, the Con29R and Con29O parts of the LA search will attract VAT. The LLC1 element will remain non-vatable. For simplicity, should the proposals go ahead, we will continue to display the price of the search as a single price with the VAT breakdown shown in full on invoices.
It is not clear yet how these proposals will affect prices as some LA’s may decide to lower their prices to absorb the effect of the VAT, others will simply add VAT to the relevant parts and therefore some LA search prices will increase.
What Do I Need To Do?
Local authorities are currently being consulted on these proposals and therefore there is a possibility that they won’t go ahead, however, HMRC have made it clear that they believe VAT should be charged on the Con29 elements of the LA search and therefore we are expecting the proposals to be implemented.
The proposed date for implementing the VAT charge is 01/02/2016 which may affect quotes that you are currently giving to potential clients. It may, therefore, be prudent to warn clients that this is being discussed and any business conducted after the 01/02/2016 may be affected if these changes are brought in.
How Can Searchpoint Help?
As soon as HMRC have made a final decision we will inform you and give as much notice as possible of the VAT changes.
Searchpoint will show and charge the correct pricing should there be any VAT legislation changes. You can be assured that any price that you see at the point of order will be the price charged.
If you are concerned about these proposals let us know your thoughts and we will publish your comments on social media
If you would like any further information please contact us on 0845 680 5608 (local rate).