Confusion with property search charges

27 January 2017

To standard rate or to not standard rate? What’s the latest with CON29 fees.

As you may be aware, by informal HMRC concession, property search fees (CON29) levied by local authorities have recently been treated as outside the scope of VAT. HMRC wrote to CIPFA on the 4th November 2016 to effectively and formally remove the concession and requesting VAT to be accounted for after the 1st January 2017.

However, just before the Christmas break on the 20th December 2016, HMRC wrote again to CIPFA to announce that local authorities may choose to delay the implementation (to no later than the 31st March 2017) where that authority may have difficulties in making the change.

In summary, if your authority has now made the changes you should continue to account for VAT on the charges; if the changes have not yet been made and will be difficult to implement, prompt notice should have been provided to HMRC with confirmation of when the changes will be made effective from.