Update on VAT and CON29 Searches

Below is an update from the Sector Relationship Manager for Local Authorities at HMRC, this statement has also been provided to CIPFA.

“I (HMRC) understand the VAT deadline is not possible for a few authorities. In fairness to those authorities which have already made the change, I (HMRC) do not propose a general extension to the deadline of 1 January 2017. Instead, where Local Authorities cannot make the change by 1 January, they will need to tell us when they can do so - but we expect full implementation by no later than 31 March.”

In addition, HMRC have said: “If all the other LAs need to work to 31 March I do not have an issue with that. I have only asked to be notified so that Authorities that do require more time are not penalised in the future for not being able to implement the changes for 1January.”

The guidance and clarification requested jointly by LLCI and Land Data regarding the products to which VAT should be applied, along with further information on the interpretation of the tax point rules will be forwarded as soon as it is received from HMRC.

The 31 March date therefore allows local authorities, along with their software providers, the opportunity of considering the guidance (to be issued by HMRC) before implementing the necessary changes to their Local Land Charge systems. The only proviso is that those LAs wishing to take advantage of the 31March date should notify HMRC, via the normal route, of their intention to do so.  

Lastly, after giving HMRC’s statement careful consideration and assessing the impact on the industry as a whole, it is LLCI and Land Data’s view that LAs, NLIS, other intermediaries, software suppliers, conveyancers and consumers would all benefit from the clarity of working towards two well-promoted implementation dates, those being either the 1 January or the 31 March and we hope LAs will take this into consideration when deciding how to move forward.