SDLT: The Importance of Asking an Expert

Posted 19th September 2023 by ctatax-admin

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £30 million in overpaid SDLT. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.

It’s well-established that Stamp Duty is a complex and ever-evolving part of law, but the need for expert advice on your SDLT bill is more urgent than you might realise.

We’ve spoken at great length about the sheer complexity of SDLT legislation in many previous articles and blogs. With so many reliefs, exemptions and exceptions in the legislation, not to mention the moveable feast of so many amendments over the years as successive governments have sought to achieve sometimes contradictory outcomes, it’s unsurprising that SDLT remains so poorly understood, even by those who work within the property industry.

But what you may not know is the very nature of how HMRC deals with refund claims where a potential error has been identified.

When it comes to refunds, HMRC operate a ‘Process Now, Check Later’ system according to their own guidance. In other words, if you submit a claim, in the vast majority of cases, HMRC will simply process that claim and issue a refund.

This leaves them up to 9 months to potentially check on the details of the claim and challenge it.

That 9-month window is vital to note, because it is the standard time window HMRC has in which to open an assessment on any normal case. Often you may see other timescales quoted – 4 years, 6 years, even 20 years. This obviously sounds worrying, which is the intent.

But here’s the thing. If you have taken appropriate advice from a qualified expert, none of these additional windows will apply.

The 4-year window refers to where HMRC ‘discover’ something about the case (hence also referred to as ‘discovery assessments’) which they could not reasonably have been expected to know within the 9-month period. Essentially, this period, which may be extended to 6 years in certain cases, was designed specifically to target individuals attempting to hide something from HMRC. In the case of a properly filed refund request based on the application of appropriate legislation, this would simply not apply, and HMRC would struggle to argue otherwise.

Read: Cornerstone Tax cuts homebuyers stamp duty bills by £30 million

Similarly, the 20-year window applies only where HMRC suspects fraud or carelessness has been a factor in a factual error contained in a submission. Proper advice will ensure no errors are present, and there is no case whatsoever for either carelessness (you have proceeded on the basis of expert, qualified advice) or fraud (you haven’t knowingly claimed a refund on an unlawful basis)

HMRC’s argument in favour of their ‘process now, check later’ system is that it enables them to process refunds quickly, and that as a self-assessed tax, ultimate responsibility for the correctness of any SDLT Refund lies with you.

In other words, it isn’t their problem – it’s entirely up to YOU to ensure the amount claimed is correct.

The reality is that the constant flagging of irrelevant timescales to challenge are all deliberately deployed to discourage taxpayers from exercising their rights. Who, after all, wants to run the risk of submitting a claim for a refund and then potentially waiting years for HMRC to potentially decide to challenge it?

Read: £6 billion overpaid stamp duty on SSAS and SIPP pensions

Many refund claims firms exist. Much like with PPI, a whole cottage industry has grown up around the potential for reclaiming incorrectly paid money. Many such firms do not operate under the aegis of any tax qualification or with the support or authority of qualified advisers, knowing that HMRC will likely pay the refund anyway, and that they will not need to be concerned with any potential future repercussions if and when a challenge arises later on, meaning that their lacking the expertise or experience to handle it are something for someone other than them to be concerned with.

Cornerstone have been advocating for many years that purchasers of UK land and property should always seek expert advice when engaging in any transaction. By engaging the advice of those with experience and qualifications in the relevant field, buyers can ensure that there is no need for a claim for a refund down the line by ensuring that the correct amount of SDLT is paid first time, every time.

But refund claims should not be shied away from either. It is the right of the UK taxpayer to submit a refund claim should they have grounds to do so. It is simply sensible practice to ensure that any such claim is only made on the back of the most strenuous, careful and qualified advice. To do otherwise, we believe, would invite an unacceptable level of risk into the process, and one which would be relatively open-ended.

What we won’t ever do is tell you that a refund claim is straightforward, guaranteed or easy. What we instead can and do say is that our experts have worked with SDLT since its inception in 2003. In those intervening decades, we have carefully monitored and adapted to the various changes which have taken place, from the switch to the ‘slice’ system of assessment from the original ‘slab’ system, through the variance of thresholds and the addition of Multiple Dwellings Relief (MDR), the Higher Rate on Additional Dwellings (3% Surcharge) and the recent Non-UK Resident Surcharge.

We have assisted thousands of taxpayers in navigating the legislation, and in the last few years alone have overseen the reclaim of over £30 million in what we professionally adjudge to be overpaid Stamp Duty on cases from simple residential purchases to large commercial acquisitions.

If you have any question marks over Stamp Duty paid on any transaction, make sure you contact us today, for an honest, fee-free initial appraisal of your circumstances.

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £30 million in overpaid SDLT. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.