The government has agreed to go back to the drawing board over proposed reforms to the way it collects stamp duty land tax in England following consistent concerns raised by conveyancers.
Chancellor of the exchequer Philip Hammond, in his first and final spring budget, announced that a controversial reduction in the window for filing and paying stamp duty land tax (SDLT) from 30 days to 14 days would be delayed until 2018-19. However, a summary of responses to HM Revenue & Customs’ SDLT consultation, published yesterday, reveals that the government is willing to rethink other proposals also.
HMRC said there had been a 'high degree of consistency’ in the 85 responses to last year’s consultation, which nearly all came from law firms.
As a result, the government has abandoned the proposal to reject paper returns in circumstances where agents should have filed online.
HMRC receives more than 31,000 SDLT paper returns every year. Four in 10 of the paper returns contain errors, such as unanswered mandatory questions or answers that do not correspond with information provided elsewhere in the form.
However, respondents said such a measure would delay the conveyancing process, in particular the registration of the new owner.
If online filing becomes mandatory, the government will consider ‘other alternatives’ to ensure compliance, the response said.
Meanwhile HMRC has decided not to proceed with modifying returns to allow users to input direct debit details online. Several respondents highlighted that their internal governance processes would not allow them to provide direct debit details from their firm’s client accounts.
The government acknowledged that shortening the payment and filing window could lead to difficulties for conveyancers dealing with complex transactions, particularly where they are required to provide additional information in relation to leases.
The additional information is collected on behalf of the Valuation Office Agency, whose work is important to determine and assure central and local government revenues, HMRC said.
It added: 'Postponing implementation of this change will give HMRC and VOA time to determine the best way to obtain the information necessary for the VOA in future, and to consider whether some or all of the information on complex transactions still needs to be linked to the main SDLT filing timetable.
'However, if it emerges that the additional information for VOA must continue to be collected, but not necessarily to the same timetable, HMRC will consider separating it from the main SDLT return and place it into a separate online return with a different timetable,' the response states. It acknowledges that guidance on the process of deferring payments could be improved.
It also concedes that mandatory online filing and electronic payment would have to be supported by ‘reasonable exemptions and improved guidance’. HMRC will consider whether to introduce these at the same time as reducing the filing and payment window, or as part of a separate change.
Allowing purchasers who are not filing through an agent access to the SDLT online service would be appropriate in today’s digital environment, the government said.
Other suggestions raised by respondents include: an ‘address look-up’, which would be needed where a property has no postcode, such as for a new development; HMRC issuing information required for the registration of land directly to the Land Registry; and functionality to allow customers to amend SDLT online returns within 12 months.
Recognising the ‘clear support’ to improve HMRC’s online stamp duty online service, the government will carry out further work to determine which improvements should be introduced, the response states.