Stamp duty land tax (SDLT) has long been a headache for property conveyancers and solicitors, thanks to increasingly complex rules and reliefs.
The topic has been back in the headlines only recently after former deputy prime minister Angela Rayner resigned, admitting she’d underpaid SDLT on her property purchase in Hove.
And while Chancellor Rachel Reeves’ autumn budget announced no imminent SDLT changes, this topic remains a talking point in the property industry – not least due to the serious financial and reputational consequences of getting it wrong.
Small errors, big repercussions
Research from InfoLegal suggests that four in ten SDLT returns contain mistakes, often due to misclassifying properties and misinterpreting reliefs. Conveyancing teams are frequently directed to generic guidance, leaving them to navigate complex rules without specialist advice.
Errors can result in compliance breaches, HMRC penalties, client disputes, negligence claims, and reputational damage.
The penalties alone can range from 30% to 100% of the SDLT lost plus interest, depending on whether HMRC classifies the error as careless or deliberate. So, even unintentional mistakes can have significant repercussions.
And it’s easy to see how SDLT errors can occur:
- Complex rules – SDLT is a minefield with five main tax bands and numerous reliefs and exemptions.
- A shifting landscape – changing thresholds and temporary reliefs mean it’s hard to keep up with the latest rules.
- A reliance on manual processes – many firms still rely on manual calculations, creating inefficiencies and risks of human error.
- Tools that aren’t up to the job – online calculators (including HMRC’s SDLT calculator) lack the functionality to handle some non-standard scenarios (such as corporate transactions and trusts).
- Pressing deadlines – conveyancers are under constant pressure to move fast and provide instant answers in this bewildering landscape.
A recent study from SCA Tax found that 11% of 7,000 submissions contained overpayment errors – highlighting the scale of the problem.
Meanwhile, SDLT scams are on the rise. Unscrupulous SDLT reclaim agents are exploiting weaknesses in the system, encouraging spurious and unfounded claims based on misinterpretation of the law (HMRC).
These issues are all creating a perfect storm within the property industry – underscoring the need for a comprehensive, tailored solution to protect conveyancers and their clients against liability.
4Stamp: a certified solution to ease the pain of SDLT
At OneSearch, we’ve partnered with 4Stamp to bring you a certified SDLT verification tool that provides accurate tax calculations instantly.
4Stamp is a cloud-based solution tailored for the ever-changing UK conveyancing landscape, enabling firms to meet their regulatory obligations under the Conveyancing Quality Scheme.
4Stamp is far more than an online calculator. It gives you peace of mind that your tax calculations are accurate, so you can get on with your job of delivering a first-class conveyancing service.
Safeguard your business against non-compliance
Using 4Stamp, you can:
- Protect against risk – get a certified tax assessment and a complete audit trail. Specialist tax advice is available for more complex cases.
- Get peace of mind with indemnity protection – all calculations are covered by professional indemnity insurance, transferring liability away from your firm.
- Save time and streamline your processes with instant calculations – reducing inefficiencies and admin work.
Conveyancing experts and solicitors can manage and track their SDLT and LTT (Land and Buildings Transaction Tax) calculations directly through our OneSearch platform – alongside Local Authority searches, environmental reports, and other conveyancing tasks. 4Stamp brings together all aspects of conveyancing in one place.
The 4Stamp team can even manage any queries or investigations related to your SDLT transactions on your behalf.
“We understand the challenges that SDLT presents for conveyancers and solicitors,” explains Liz Jarvis, Managing Director, OneSearch. “The rules and regulations around SDLT are so complex and convoluted that even experienced conveyancers can fall foul of the system.”
“For conveyancers and solicitors, 4Stamp eliminates the financial and reputational risks associated with non-compliance while also streamlining the whole conveyancing process,” explains Liz.
“For buyers, 4Stamp ensures that they are paying the right amount – and not unwittingly putting themselves at risk of HMRC penalties or even overpayment.”
Bringing clarity and compliance to conveyancing
Speculation persists that the government is still considering yet more changes to property taxes, including SDLT. In a complex and uncertain market, 4Stamp brings clarity and compliance to ease the pain of SDLT.
Ready to take the first step? See how 4Stamp can help you improve compliance, reduce risk, and protect you and your clients from liability – watch our latest video for an in-depth look at SDLT compliance and how to include it in your next search order.
