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Law Society reveals HMRC is contacting firms regarding VAT treatment of electronic searches

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We understand that HMRC has begun to contact firms directly regarding the VAT treatment of electronic searches.

We understand that HMRC has begun to contact firms directly regarding the VAT treatment of electronic searches. The Law Society has recommended that firms that receive letters from HMRC should ‘contact them directly particularly where the firm’s practice was to pass on the search to the client’, using the email address: lauren.rabaiotti@lawsociety.org.uk.

The Law Society is currently in the process of reviewing its guidance on VAT disbursements, and has engaged with HMRC on what it calls the ‘inconsistencies’ arising from the decision in Brabners LLP v HMRC [2017] UKFTT 0666. In the meantime, the Law Society recommends that firms should follow HMRC’s guidance alongside the list of typical disbursements of law firms, and the imposition of VAT, as per the Law Society’s guidance.

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