Official searches to include VAT?

HMRC has decided that local searches should be vatable and, if the proposals do not meet opposition, it is expected that CON29 searches provided by Local Authorities will include VAT from 1st February 2016.

From February 1st 2016, it is expected that VAT will be added to CON29R and O reports.

HMRC has decided that CON29s should be VAT applicable and have proposed to Local Authorities that the 20% charge is applied.

Local Authorities have until 21st January to raise any objections to the VAT charge, however early indications are that the majority will be making the change without objection.

Will this affect the price of local searches?

Although the measures seem likely to be implemented, it is not yet clear how prices will be affected.

Some Local Authorities have indicated that they will absorb the cost of the VAT; some will take the opportunity to review their pricing altogether; some will simply add VAT to their Con29s; and others have yet to decide.

If prices do increase, then it is only the Con29 element of the local search (& any optional questions) that would be affected, as the LLC1 element of the search remains non-vatable.

What does this mean for my clients?

If prices are affected, then it would be prudent for conveyancers to inform clients of this potential increase.

What should I do?
We will keep you informed, giving you as much notice as possible if the proposed changes do go ahead.

Rest assured that if the prices of local searches are increased, VAT will be added at the point of order as with other searches and you need make no other change.

If you have any questions or concerns please contact your account manager or the helpdesk by calling 0844 249 9200 or emailing helpdesk@tmgroup.co.uk