Solicitors, VAT, invoices, Brabners v HMRC ruling on Disbursements

This looks like an immensely useful resource. I work for a solicitor who does Conveyancing and Probate and we are increasingly concerned about where and to charge VAT, particularly after Brabners v HMRC concluded that the electronic property searches in question were supplied to the law firm which used them as part and parcel of its own overall supply of legal services to the client. That meant that those costs could not be treated as disbursements for VAT purposes. So we have created a list of questions we'd like definitive answers to. This is a long list but we'd be hugely appreciative for some clarity. 1 - Conveyancing - do we have to charge VAT on £6 office copies, £2 bankruptcy fees, £3 OS1, copy documents from the Land Registry? I think we are ok with the land registration fee when we register the client as the owner. We treat these as disbursements. They are not on an invoice – just shown on the completion statement. If VAT was chargeable presumably we would show the VAT split on the journal from office account to HMLR nominal? 2 - Probate - I think that the £273 probate fee is a non vatable disbursement. Is this right? 3 - Postage - do we have to do a VAT invoice to a client where we pay and arrange for original documents to be sent by a courier at the request of the client? Would it be better for us to tell the client to arrange and pay for this service themselves and for collection from reception during office hours? When international delivery is involved this would be impossible. 4 - Conveyancing - Do we have to charge VAT on £13.22 for a no search Chancel Indemnity insurance policy? We explain the risks to the client beforehand (is this classed as advice?) and the client decides whether they want to insure against that risk by getting the policy. The supplier does not charge VAT. We are provided with the policy schedule and we pass that, without comment, onto the client, so no advice is given on the CONTENTS of the report, but of course we advise the client to GET the report. 5 - Probate - In a Deceased's Estate we arrange and pay for the unoccupied buildings insurance policy until the property is sold. The premiums are not subject to VAT. Should these appear on our invoice? Should we be charging 20% VAT on top? Sometimes, when there is insufficient money on client account we use office money and then transfer client to office to reimburse us when money is available. The Executor knows this is what will happen so we have their authority. Sometimes, I am the Executor. We cannot risk a house burning down and being liable for the loss so we have to use our money when a lay Executor cannot afford the premium. 6 - Probate - In an Estate where we submit meter reads and pay the gas bill or engage a house clearance company should these payments showing the VAT be on our invoice? Would the VAT rate be at 20% on the gas bill or the energy VAT rate the supplier charges us ie 5% (I think)? 7 - Conveyancing - When selling a flat if we get the cost from the client and then pay for the Management Pack, the supplier charges us VAT then we are showing this (without a VAT breakdown) on the completion statement. Should this appear on our invoice as a paid expense? Sometimes, where we can, we arrange for the client to request the Management Pack direct from the management company; they pay for it on their card and the Pack comes to us. We pass that to the buyer’s solicitors without comment. Sometimes, I am the client where I am Executor of an Estate. 8 - All Clients ID checks for anti-money laundering requirements - With regard to ID checks we use an ID search company, paid upfront; some items on their invoices we are charged VAT on but there is no VAT on the actual searches. Should the cost of the ID check (£2.82 + VAT) be shown as a paid expense or professional charges on our invoices? We do not charge for our time in undertaking the searches via their website. The search result is never passed to the client as it's done for AML regs. When we order the search (the result is immediately available and already paid for) we do a journal with a VAT breakdown from office to the search provider nominal. This is invoiced early in a purchase transaction but only on completion on a sale only transaction. 9 - With regard to property searches. Our search provider charges us VAT. We do comment on the search results so we are converting this to a service. These were invoiced to the client as our professional charges for ordering the searches on behalf of the client. We only pass on the charge we paid to the client and only after we have paid for the searches out of office account. We do not charge for our time in ordering the searches via their website. I am thinking these should be paid expenses on our invoice? We take an upfront payment from the client to cover the ID checks and property searches on a purchase. The invoice for our time spent on the file is submitted on completion. So on a purchase there are 2 invoices to the clients. Any direction or advice from HMRC would be appreciated. Sorry for the long post.

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