Speaking at the Local Land Charges Conference in Blackpool, Fiona Hoyle, chairman of the Council of Property Search Organisations (CoPSO), insisted that local authorities were being given an unfair advantage when it came to supplying property searches as they were exempt from charging VAT.
Hoyle claimed that the exemption status was unjustified because it was operating commercially in the same way as private companies and called for it to end.
She said: “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.
"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.”
Hoyle believed the issue needed to be addressed urgently as the sector opens up, following recommendations by the Office of Fair Trading.
Eddie Goldsmith, senior partner at Goldsmith Williams, said private search companies were often more efficient than local authorities.
He commented “Search companies set themselves up taking this into account. However, private search companies are often better than local authorities anyway as they are usually much quicker.”
