HMRC halves time for payment of Stamp Duty Land Tax

Simon Parker, Head of Ashtons Residential Property Department, advises that buyers of properties, whether residential or commercial, need to be aware that as of 1st March 2019 the HMRC has more than halved the available time to file the return required and pay the Stamp Duty Land Tax, which is levied on all property purchases over a certain amount.

They should therefore ensure that the firm they chose to undertake their conveyancing for them will attend to this on their behalf within the new time limit set so as to avoid penalties and fines being levied.

According to HMRC, most returns are filed within 14 days of a transaction completing and as a result of this it has reduced the deadline for payment from 30 days to 14 in England and Northern Ireland to make collecting the duty more efficient.

The change was first mooted in 2015 but has only been introduced this year after several issues, specifically around complex transactions dealing with leases, were dealt with.

The new 14 day deadline only applies in England and Northern Ireland because Scotland and Wales now have their own stamp duty regimes.

Generally, a conveyancing solicitor will complete the necessary forms and file them online with HMRC, paying the duty as part of the conveyancing service offered to buyers, although some firm make a separate charge for this work as they do not consider it part of their “standard practice” since HMRC made stamp duty a personal tax.

HMRC has also made charges to the return form for easier compliance, and the tax authorities are carrying out a consultation with stakeholders on mandatory online filing of the return with electronic payments.

First-time buyers are exempt from paying stamp duty on purchases up to £300,000, but a return on the transaction must still be filed within the deadline even when no tax is due.

Simon Parker further advises that the Residential Team at Ashtons Legal undertake the required steps to file and pay the return as part of their service and do not charge clients extra for this. Whilst in some instances there may be a charge for calculating and advising on how much the SDLT payment will be, particularly if the transaction I complicated or involves a mixed use property, the filing of the required form and payment of the stamp duty itself is included in the amount of the original quote provided.

For further advice on this, or for a quote in relation to any proposed residential property transactions, please contact one of our Residential Property Team members in our offices at Norwich, Cambridge, Bury St Edmunds or Ipswich.