Members of the Property Section will be aware of the First-tier Tax Tribunal decision in Brabners LPP v HMRC in which the Tribunal concluded that the act of obtaining electronic property searches from a search agent formed part of the overall service provided by a firm to its client, on the basis that the searches enable the solicitor to advise and therefore, the fees for those searches could not be treated as disbursements for VAT purposes.

The decision has resulted in uncertainty for members and search providers who are seeking clarity on the correct VAT treatment of electronic property searches.

The Law Society is establishing a working group to help provide updated guidance to the profession on this issue. In the meantime, in the absence of any binding adjudicated decision on the subject, we suggest that firms follow HMRC’s published guidance on the treatment of searches.

If you have been contacted by HMRC regarding historic VAT searches, we would like to hear from you, particularly if the firm’s practice was to pass on the search to the client, so satisfying the second of the eight conditions set out in HMRC’s VAT Notice 700 for treating a payment to a third party as a disbursement. Please email