It cannot be stressed enough, that seeking the correct SDLT guidance from an established company is of the utmost importance. SDLT Check was developed by CapEx Associates Tax Ltd, a leading property consultancy operating since 2016.
In previous articles from HMRC, homeowners have been cautioned against unsolicited calls from unscrupulous tax repayment agents encouraging them to submit speculative claims for Stamp Duty Land Tax (SDLT) refunds, which could result in substantial tax liabilities.
This alert follows a recent surge in SDLT refund claims to HMRC that failed to meet stringent criteria. These agents often target new property owners identified through Land Registry records and property search websites, enticing them with promises of refunds for supposedly "overpaid" Stamp Duty.
HMRC's analysis reveals that a significant portion of claims for 'multiple dwelling relief' refunds are incorrect, with up to a third failing to meet the necessary criteria. This likely being the primary reason for MDR's abolishment on 1st June 2024.
While HMRC investigates these claims, homeowners may find themselves liable for repayment, including interest and potential penalties, after the agent has collected their fee.
Nicole Newbury, HMRC's Director for Wealthy and Mid-sized Business, emphasized the risk posed by frivolous refund claims, urging new homeowners to exercise caution when approached by tax repayment agents offering "easy money" on a 'no win, no fee' basis. She advised seeking guidance from original conveyancers, independent professionals, and HMRC's official guidance on SDLT.
In one instance, a rogue agent falsely claimed that a homeowner had overpaid £60,000 in Stamp Duty, incorrectly suggesting the property could be designated as two separate units. Similar misleading claims include:
  • A bedroom being classified as a separate dwelling due to its en-suite and built-in wardrobe, with the suggestion that it could function as a kitchen with the addition of a microwave and kettle.
  • A house deemed "not wholly residential" because of occasional use of a paddock behind the garden, resulting in a mix of residential and non-residential property and lower Stamp Duty rates.
  • A six-bedroom house declared non-residential due to the use of a room above a detached garage as an office.
HMRC reminds customers to be wary of cold calls or letters from repayment agents making claims regarding SDLT relief eligibility.
HMRC has the authority to investigate claims for up to nine months, aiming to recover the full tax amount, with interest and penalties if claims are found to be inaccurate.
Furthermore, tax repayment agents are required to adhere to HMRC's Standard for Agents, ensuring professional competence and due care. This is something that CapEx Associates and SDLT Check strictly adhere to. Other agents making speculative claims may be in breach of these standards, as well as legal requirements for Anti Money Laundering supervision.