Law Society issues guidance on VAT on local authority searches

The Law Society has issued guidance on the imposition of VAT on local authority searches, although HMRC has yet to formally confirm either that the tax has been imposed or any further details.

The Law Society understands that the implementation date for the tax was 1 January 2017, but for local authorities who were unable to charge VAT on 1 January there is a "long stop date" of 31 March 2017.

The "long stop date" of 31 March 2017 may mean either of the following:

The Law Society has advised solicitors to look at the local land charges sections of local authority websites to establish when a particular authority is proposing to implement VAT on searches.

A local authority search is one of the standard pre-exchange searches that should be carried out when acquiring a property or an interest in it, or taking a charge over it. For more information, see Practice note: Searches: enquiries of a local authority.

Sources: The Law Society, VAT on CON29 and related searches update, 5 January 2017 and The Law Society Gazette, VAT on searches – new guidance for conveyancers, 5 January 2017.