If you have been charged an SDLT penalty or if HMRC are challenging an SDLT relief or SDLT refund that you have claimed, you should consider whether to appeal. 

HMRC sometimes get things wrong and Stamp Duty appeals force HMRC to review its decision. It may then allow your appeal or you can take it to the tax tribunal for a judge to decide.

When can you file an appeal against an SDLT penalty?

You should appeal a Stamp Duty penalty whenever you have a reasonable excuse for what happened. In SDLT, you will normally have relied on your conveyancer or professional adviser to file returns or refund claims and to deal with HMRC for you. But if they mess up and HMRC charge you a penalty, you can appeal.

What counts as a reasonable excuse for an appeal against an SDLT penalty?

For example, if you have been charged a penalty for late filing your SDLT return, then HMRC will accept the following as a reasonable excuse:

  • you or your adviser posted your SDLT return in good time, but it was lost or delayed in the post (for example, because of floods or industrial action)
  • your adviser was seriously ill and couldn’t control their business or private affairs (for example, they’ve had a heart attack or stroke)
  • your adviser died

You must then show that you’ve done everything you can to file your return as soon as possible.

If HMRC finds that your return or refund claim contains errors or inaccuracies due to carelessness or deliberate evasion, then you will be charged a penalty.  

However, there is a very important get out from an SDLT penalty where you relied on your professional adviser to prepare the SDLT return or refund claim. 

HMRC states that:

“If a person approaches us for advice, they are entitled, subject to the points above, to expect that our advice will be correct.

The benchmark is a person who goes to an apparently competent professional adviser, gives the adviser a full and accurate set of facts, checks the adviser’s work or advice to the best of their ability and competence and adopts it.

The person will then have taken reasonable care to avoid inaccuracy on the part of themselves and their agent.”

If this applies, then you should appeal the Stamp Duty penalty.

What won’t be accepted as a reasonable excuse?

Despite what HMRC has said in the quote above, it is currently issuing penalties by trying to argue that despite relying on your adviser, you should also have checked the SDLT manual and SDLT return yourself, and spotted the error. 

If you are charged a penalty in these circumstances, then you should appeal. It is unreasonable of HMRC to expect ordinary taxpayers to second-guess their experienced professional adviser and spot an error that they have made.

HMRC has also said that the following do not count as a reasonable excuse:

  • you found it too difficult to fill in your return
  • pressure of work stopped you dealing with your return
  • your adviser was waiting for you to pay the SDLT, or another firm of advisers was paying it
  • you were waiting for a valuation – you should use your best guess then amend your return when you have it
  • the seller’s adviser caused a delay
  • you were abroad and couldn’t sign your return – if you plan to go abroad, you should arrange a power of attorney

Can Patrick Cannon help me appeal?

Yes – Patrick Cannon has extensive experience as a barrister in advising clients on tax and Stamp Duty appeals and presenting Stamp Duty appeals in the tax tribunal.

Contact Patrick today if you have been charged a tax or SDLT penalty or if HMRC are enquiring or investigating in your tax so that I can advise you on the way forward. 

Do not delay, you must appeal within 30 days. And remember that if you are making a refund claim for overpaid Stamp Duty, you only have 12 months from the filing date for the land transaction in which to amend your original SDLT return.

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For professional and insurance reasons Patrick is unable to offer any advice until he has been formally instructed.