Lawyers may now be held accountable for stamp duty
In the wake of the many conveyancing related complaints, particularly related to Stamp Duty Land Tax, the legal ombudsman has released a report discussing who should be held accountable for non-payment of stamp duty – the client or the lawyers?
The report titled “Complaints in Focus: Stamp Duty” reveals the disturbing trend of lawyers not paying the Stamp Duty Land Tax on behalf of their homeowner clients. The report was commissioned after the ombudsman received a large number of complaints from homeowners who were distressed about receiving calls from the HMRC about unpaid fees and penalties. After investigating the matter, the ombudsman found that most of the issues were caused by lawyers neglecting to pay the HMRC even after taking the money from the client.
The stamp duty is a tax that you have to pay while purchasing a new property which is over a certain price. According to the current rules, it is the responsibility of the homebuyer to pay the Stamp Duty Land Tax to the HMRC. So even if the homeowner had paid the tax to the lawyer who then failed to pay the HMRC, the property owner is still held accountable for non-payment.
The Council for Licensed Conveyancers have been hard at work to sort this issue out with the regulatory partners and the HMRC. The objective is to implement a system-wide change to ensure that the SDLT is paid in line with the regulatory requirements, right at the time of completion of the housing transaction.
The legal ombudsman’s report notes that stamp duty payments must be made within the 30 day time limit set by the HMRC.