The Law Society has issued new guidance for conveyancers amid continuing uncertainty over the imposition of VAT on local authority searches.
Though HMRC has still to provide any formal confirmation, Chancery Lane understands that although the change did take effect on 1 January, there will be a ‘long stop’ date of 31 March this year for councils who are not ready.
It remains unclear whether councils that do not begin charging VAT from 1 January will now wait until 31 March. It could mean there will be a ‘trickle’ of councils who begin charging on different dates in between.
Such ‘piecemeal implementation’ would be far from ideal, said the Society, which has urged solicitors to look at the local land charges sections of council websites to establish when their authority is proposing to implement the changes.
Society president Robert Bourns said: ‘It is extraordinary that we have not received substantive and direct responses to our letters to HMRC about this issue, as we could have provided better information to our members and this may have assisted in a smooth transition to a new regime.
‘We will be providing more information to solicitors as it becomes available.’
Council searches provide information for buyers and lenders about matters including planning decisions, building regulation consents, highway information, road schemes and public footpaths.
They are carried out on the Law Society’s CON29 and CON29O forms, providing standardised questions to make conveyancing searches quicker and more efficient for both councils and property buyers.
The reason for addition of VAT is unclear, though it would appear to be intended to level the playing field between councils and private search organisations, which already add VAT to searches they are instructed to conduct.