Edward Nally urges solicitors to voice their concerns on the stamp duty land tax so that the Law Society can lobby Government to change a faltering system


It is nearly 18 months since the new stamp duty land tax was hastily introduced by the government – the effect of which has been little more than chaotic for practitioners and for taxpayers.


The situation as it stands simply cannot persist. When the government announced its proposals for the tax in the 2003 budget, the Law Society’s tax law and conveyancing and land law committees were both involved in the initial consultation process. Even at that early stage, it was alarmingly clear that the government had already decided how it would implement the proposals, regardless of the wide-ranging consultation of key stakeholders that had been promised. This became particularly obvious when the government chose to ignore the Law Society’s concerns about the lack of scrutiny of some of the proposals and, even more so, when the consultation process ended abruptly.


It soon became apparent that the new tax would be a reality regardless of the views expressed and it was introduced on 1 December 2003.



Despite the Law Society’s concerns, Chancery Lane made every effort to co-operate fully with the Inland Revenue and Customs & Excise to ensure that the new regime was as workable as possible for taxpayers and for solicitors. We knew that the profession had some concerns about the system but we were pleased to see that many rose to meet the challenges it presented and adapted quickly to the changes that it imposed.


Although the initial launch of the tax went reasonably well, it was not long before problems for solicitors and taxpayers began in earnest. This was particularly the case when the ‘light touch’ applied by the Revenue was lifted in autumn 2004 and a scanning system to read the returns and raise requisitions was introduced.


It was at this point that complaints from members of the profession started to flood in. Many were frustrated and demoralised by the unnecessary complexity and unwieldiness of the new system. The Law Society has received more complaints about stamp duty land tax than about any other property-related issue affecting the profession. The response has been overwhelming.


The Law Society is appreciative of the feedback it has received from members of the profession. It is extremely important that we are kept informed of the difficulties faced by practitioners so that we can continue to lobby the Treasury and the Revenue.


So far, we have heard from every sector of the profession, from all sizes of firms – residential and commercial. The most common problems experienced include forms being returned even when all the necessary information has been supplied. Guidance for solicitors has proved extremely difficult to locate, and is non-existent in some cases. Many have experienced difficulties getting through to the Revenue’s telephone helpline – waiting times of up to 40 minutes have been reported and the system appears to cut callers off if the queue is too long.


Once through to the helpline, the advice given is often inaccurate and/or inconsistent. As a result of the problems encountered by firms, many have suffered unnecessary delays, extra costs and fines and both solicitors and clients have simply had enough.


What can be done? First and foremost, if solicitors have experienced difficulties, I urge you to join the Law Society’s campaign through the Web site at: www.lawsociety.org.uk. That input will help the Society to make an even stronger case for change. There is plenty that can be done to improve the situation and Chancery Lane will continue to press the Revenue to make the necessary changes.


For instance, the scanning, IT and administrative systems at the Revenue should be reviewed urgently, as they appear to be the underlying cause for many of the problems and delays. This includes making the unnec-essarily complex forms much more user-friendly than they are at present.


Guidance produced for practitioners must be clear, concise and easily accessible to all and it should be available in a single location rather than from a number of confusing sources. The Law Society in turn will then be better able to promote meaningful training for solicitors.


The Revenue helpline is clearly under pressure, but in any event it must be able to provide a high quality service to solicitors and to their clients. This will only be achieved if it receives further investment to provide advisers with effective training and to increase their number. The stamp duty land tax provides the Treasury with around £7 billion pounds annually – there is simply no excuse for failing to invest in the system to ensure that it functions efficiently and effectively for practitioners and taxpayers.


Since the introduction of the regime, increasing numbers of practical, legal and technical problems have plagued members of the profession and their clients. The situation is intolerable and, although the Law Society has repeatedly pressed the Treasury and the Revenue to remedy these problems over the past year or so, it continues to deteriorate.


We need to see improvements and quickly – the system is failing legal practitioners and, most importantly, taxpayers. The government cannot ignore the enormity of the situation any longer and it must undertake a full review of the system as a matter of urgency.


Edward Nally is the Law Society President