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HMRC to update guidance amid stamp duty confusion

HMRC to update guidance amid stamp duty confusion

HM Revenue & Customs has confirmed it is updating its guidance on the higher rates of stamp duty, amid data 15,700 people have had to claim refunds for wrongful charging.

Over the past few months, FTAdviser has been receiving complaints from consumers and advisers over thousands of pounds being mistakenly added onto people's property purchases, usually by solicitors who are unsure of the rules around the additional stamp duty land tax (SDLT).

The trade body for the legal profession, the Law Society, waded into the debate, with a spokesperson calling the current guidance from the tax man "complex" and "confusing."

However, last night  (13 February), a spokesman for HMRC told FTAdviser: "[We keep] all guidance under constant review, including taking legal developments into account.

“HMRC is working to update its guidance on the higher rates of stamp duty land tax.”

The updated guidance is expected shortly. 

Earlier this week, a spokesperson for the Law Society, said: "We have raised concerns with HMRC about the lack of clarity in parts of their guidance, which has led to unnecessary confusion for solicitors and their clients.

"As part of the government’s consultation on improving the home buying process, we called for consumers to be provided with more up front information about fees such as stamp duty land tax.

"We hope the government will take action to protect consumers and ensure they have all available information to make an informed decision when buying a home."

Since the government's additional 3 per cent stamp duty land tax was applied to buy-to-let properties in 2017, HMRC figures have revealed many people have been caught out by the tax unnecessarily - with more than 15,700 individuals wrongly paying the charge and being eligible for a refund.

Sarah Dwight, a member of the Law Society's conveyancing and land law committee, commented: "It is a very complex area and the guidance does not give conveyancing lawyers much clarity.

"HMRC seems to have thought the guidance it issued was going to be sufficient, but there are so many different types of scenarios that arise when people are seeking to buy and sell a property, that not everyone fitted into HMRC's boxes."

Richard Smith, founder of financial education site MoneyTrainers, said: "This is good news and it certainly is a step in the right direction.

"But my concern would be that there are lots of people out there who have been financially disadvantaged as a result of this confusion, and do not know they have been charged the additional 3 per cent stamp duty wrongly.

"Perhaps HMRC and solicitors should go back and review all the files on SDLT they have had over the past couple of years, and solicitors also, and make amends accordingly. Sadly, it's usually the consumer that ends up in detriment."

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