The Council for Licensed Conveyancers (CLC) has published new guidance on the correct VAT treatment of disbursements. The guidance note brings together information and resources with the aim of supporting firms in determining how to treat different disbursements for VAT purposes.
As well as a revised definition of the term ‘disbursement’, the guidance note includes an outline of relevant case law and links to current HMRC guidance.
It also includes several case studies, practical steps firms may wish to consider, and example invoices showing the VAT treatment of different disbursements.
The CLC said: “Whilst we encourage practices to refer to the guidance note when determining how disbursements are treated for VAT purposes, compliance with it is not mandatory.
“Practices are accountable to HMRC for decisions as to the VAT treatment of disbursements. How practices deal with different disbursements is a matter for them taking account of relevant facts and circumstances, and if necessary, with the benefit of their own legal advice.
“We cannot offer practices any advice on VAT matters and should questions arise, we strongly encourage practices to consult HMRC and if necessary, seek independent tax advice. “
The CLC invites feedback on the note, which can be emailed to policy@clc-uk.org.
