Solicitors search fees are not regarded as a disbursement

In a recent decision of the First Tier Tribunal (Tax) HMRC challenged the VAT treatment of searches undertaken by Solicitors on behalf of their clients.


In the appeal of Brabners LLP, the Tribunal ruled that the cost of searches, which are supplied electronically (rather than via the post), are not simply disbursements that are merely passed on to their clients. Instead, they are components of the Solicitors onward supply of legal services, with the result that they attract VAT at the standard rate.


In light of the above, if your business or your clients undertakes searches on their client’s behalf, and passes the costs on to the client, additional VAT should be charged.


Please contact our free helpline to discuss this case in further detail.


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