Stamp Duty Land Tax filing and payment window will change on 1 March

George Hay Chartered Accountants

In the Autumn Statement 2015, the Government announced that it would reduce the Stamp Duty Land Tax (SDLT) filing and payment window from 30 days to 14 days.

SDLT is a tax that is chargeable on the purchase of commercial property over £150,000 and residential property over £125,000, unless an exemption applies to the transaction.

Whether or not SDLT is payable, HM Revenue and Customs (HMRC) requires a return to be received within 30 days of the transaction completing and can issue penalties for failure to comply.

Originally intended to come into effect from tax year 2017-18, the proposals were met with strong opposition at the time and they were subsequently deferred until 2019.

Given that we are now in said year, commercial and residential property owners should be mindful that the new rules will apply to transactions with an effective date on or after 1 March.

In addition to the two changes already discussed, the number of questions on the SDLT form will also be reduced and it is intended that this will simplify the administrative requirements somewhat.

Any simplification to the property tax system is typically welcomed and, for the most part, these changes are likely to benefit property owners by accelerating the process of paying SDLT and making it easier to understand.

However, some conveyancers and property lawyers are concerned that 14 days simply isn’t enough time to prepare a return and arrange payment of what is owed when the property transaction in question is complex.

HMRC are confident, however, that in the majority of cases the time limit will not present a problem and will serve to ‘improve the efficiency of the SDLT system’.

It’s important that property owners diarise the new deadline because, as with any HMRC deadline, penalties will be issued to those that fail to file on time.

Automatic fixed penalties will apply to late filings as follows;

  • £100 if a return is filed up to 3 months after the filing date;
  • £200 if a return is filed more than 3 months after the filing date.

A tax-based penalty is also payable if the return is not filed within 12 months of the filing date; this can equal up to the full amount of the tax due on the return.

Here at George Hay, our team of property experts are on-hand all year round to ensure that you are always up to date with the latest legislation. We can help homebuyers and investors to understand their current tax liabilities and prepare for changes to property taxation now and in the future; identifying risks and opportunities along the way.

If you’d like to discuss your circumstances with one of our experts call us today on 01480 426500.