A disbursement is somebody else’s charge

A disbursement is money the firm pays out on a client’s behalf: a search fee, a registration fee, a court fee. A professional fee is what the firm charges for its own time. Both appear on the same completion statement and the distinction is invisible unless the statement makes it.

Where VAT lands

VAT sits on professional fees. On disbursements it depends on whether the charge was VAT bearing when the firm paid it and on how the firm accounts for it. Court fees and Land Registry fees are outside the scope of VAT. Most search products are not.

The practical consequence is that two quotes with the same headline can differ by the VAT treatment of a few hundred pounds of searches and neither quote will say so.

What good looks like

An estimate that lists each disbursement, states whether VAT applies to it, and totals the file once. Anything else asks the client to do the arithmetic without the rates.