VAT concession withdrawn for VAT on postal Property Searches
HMRC has for some time granted a VAT concession that has enabled Conveyancers not to charge clients VAT on searches obtained by POST.
This concession will be formally withdrawn on 1st December 2020 but as firms move into their autumn VAT quarters they should be changing their billing systems to charge clients VAT on this former “disbursement”.
HMRC has also published new guidance following the consequences of the Brabners court case.
Further information on these important changes can be found on the Law Society link below and on the HMRC website.
The distinction between what is a true disbursement and what is “profit cost” has become very blurred and firms should review their policies on charging VAT on “disbursements” to avoid facing a large VAT demand where they have not recovered such VAT from their clients.