Taxing times for conveyancers and homebuyers as payment timescale cut

THE taxman requires buyers of property to submit a Stamp Duty Land Tax (SDLT) return if the purchase price is £40,000 or above, whether or not duty is payable.

Ordinarily, it is the buyer’s conveyancer who completes and submits the return to HMRC as agent for the buyer, unless the SDLT calculation is complex.

Conveyancers are not tax advisors and thus in certain purchase transactions the buyers must take independent SDLT advice from their accountant or tax advisor.

As of 1 March 2019, the time limit within which to submit the SDLT return to HMRC and pay the relevant duty has been reduced from 28 days to 14 days.

This places increased pressure upon conveyancers to complete the online seven-page return and make payment of the calculated tax.

Failure to do so will incur a penalty of £100 and interest to be added.  It will be the conveyancers who have to pay such a penalty if they have undertaken, on behalf of their purchaser clients, to act as agents and deal with the return and tax payment.

Conveyancers are not trained in respect of the tax area surrounding SDLT and yet are expected to have full knowledge of it and to deal with the completion and submission of the return as part of the purchase process.  In the main conveyancers do undertake this task and typically will raise a small fee for this service.

Essentially the conveyancer is the unpaid tax collector for HMRC and is now being placed under great pressure to do this within a relatively short period of time following completion of the purchase transaction.

HMRC have a “stamp duty calculator” on their website but this only deals with standard transactions.  Certain tax reliefs are available, say if the purchase transaction consists of multiple dwellings.  For example if the house being bought has a granny annex or any form of separate accommodation with kitchen and bathroom facilities relief can be claimed reducing the amount of SDLT payable.

Taxing times for conveyancers!

For more information on the Stamp Duty Land Tax timescale changes, or if you have any general question about residential property and conveyancing, please contact this article’s author, our Residential Property Manager and Yorkshire Post property correspondent, John Robson, at our Harrogate office on 01423 530103 or email him at john.robson@milnerslaw.com

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