30 January 2008
Industry expert’s criticism for local authorities’ tax-break
Trade body questions ‘anti-competitive VAT exemption’
Speaking at today’s Local Land Charges Conference in Blackpool, CoPSO Chairman Fiona Hoyle will question what she describes as ‘an anti-competitive tax exemption’, criticising a tax loophole that allows local authorities an exemption from charging VAT on property searches.
“Local authorities have an exemption from charging VAT because it is claimed they are not operating commercially in the same way as private search companies. This is simply an incorrect assertion. Local authorities are now adopting a much more commercial approach in marketing their search services as they directly compete against personal search companies who supply an identical service.
“It is hard to understand why HM Revenue and Customs is not acting to remove what amounts to little more than anti-competitive tax exemption.”
Her comments come after last night’s C-NLIS Local Land Charges Awards, which included a Marketing Innovation Award, which seems to underline the competitive nature of local authorities’ search offerings. Fiona Hoyle said:
“If local authorities want to compete with private personal search companies using free-market methods such as advertising, then they must be subject to the same free-market rules as their competitors, and that means charging VAT.
“The unfair exemption to charging VAT gives local authorities an unfair competitive advantage, in a sector where the Office of Fair Trading has already recommended initiatives to deliver a level playing field.”
At last night’s award, Torridge District Council won the award for best provider of property search data.
The award, sponsored by CoPSO, recognised the local authority whose performance and overall consistency in efficiently providing search data to personal search companies enabled homebuyers in the area to enjoy efficient property transactions.
Presenting the award, CoPSO Chairman Fiona Hoyle described the local authority as “a shining example of how the relationship between local authorities and personal search firms can work to benefit consumers”.
The C-NLIS awards recognise the work of local authorities in the conveyancing process. Local authorities provide the data for personal search firms to carry out searches, as well as providing their own searches.
ENDS
Notes to Editors:
The Council of Property Search Organisations (CoPSO) is the leading trade association for the property search industry. Members provide a range of property information reports including local, environmental, chancel repair, mining, drainage and water data and produce over 2m searches each year. CoPSO’s overall objective is to drive both market and product improvements to deliver the industry’s vision of faster and better informed property transactions.
CoPSO has represented the search industry on the Government’s working groups reviewing the content of Home Information Packs.
In September 2006, CoPSO launched the Search Code incorporating:
- A Code of Practice
- Training requirements
- Independent registration and compliance functions
- An independent adjudication scheme.
- Robust insurance provisions
The introduction of the Search Code underpins CoPSO’s firm belief that, in the interests of consumer protection, only those search organisations which adhere to prescribed standards should be able to provide searches as part of the home buying process. Search firms providing over 90% of local searches and 100% of environmental searches have already signed-up to the Code, together with large water companies, chancel repair firms and the NLIS channels.