Paying Stamp Duty to HMRC

beefturnmail

Seen a few scare stories recently (on here and in press) about solicitors not paying stamp duty to HMRC, going out of business and then HMRC chasing purchasers direct to pay the stamp duty (again), plus penalties. This has got me thinking:

- Is it possible (and relatively simple) to pay stamp duty direct to HMRC rather than through a solicitor. If not, should a solicitor be able to provide some sort of receipt or something on request. I realise the risk of something like the above happening is probably quite small but I'd rather not take any risk on paying ~£10k twice!

- How can HMRC justifiably chase the purchaser - isn't it like an employer not passing on income tax collected through PAYE, then going out of business, and then HMRC chasing the employee for the income tax again? Or might HMRC start trying this too? :eek:

princeofpounds

Solicitors generally keep such money in segregated client accounts, so it should not be an issue (besides administrative delays).

Can you please point to some of these scare stories?

You can indeed pay HMRC direct, but I think a lot of mortgage lenders (who are also represented by your solicitor) like to know it has been paid for certain.

How can HMRC justifiably chase the purchaser

The purchaser is the one responsible for the tax.

You don't pay a tax by giving your money to the solicitor any more than giving it to a guy in the pub.

G_M

Agree.

If you bought the property with cash you can pay HMRC direct yourself, but most mortgage lenders insist that their solicitor (usually the same as your solicitor) pay it so they know it is done.

TBagpuss

When stamp duty is paid, HMRC issues a certificate which is needed in order to complete the registration of the purchase, so if you get office copies from your solicitor at the end of the transaction showing you as the registered owner, you can be confident that it has been paid.

If you are worried, you can ask your solicitor to let you have a coy of the completed SDLT form. This will have a unique reference number on and you can then contact HMRC to check it has been paid.

MobileSaver

beefturnmail wrote: »

Seen a few scare stories recently about solicitors not paying stamp duty to HMRC,

It's exceptionally rare that this happens and even when it does the SRA (Solicitors Regulation Authority) pays up out of its Compensation Fund.

I really wouldn't worry too much about this happening so long as you confirm that your solicitor is genuine.

Unitoons

I saw this on the BBC last week and there was a radio show which followed on.
If you google "solicitors not paying stamp duty" you'll find some articles - MSE won't let me post a link unfortunately!

[Deleted User]

I am wondering about this also, I always thought you had 30 days to pay stamp duty. I asked my mortgage provider about this and they said it does not matter to them how the stamp duty is paid the mortgage will still go through. I am wanting to delay my stamp duty by 3-4 weeks after I move in just to help the bank balance a bit rather than pay it out up front straight away especially if I don't need to...

rpc

You hear about the small handful of times when something goes wrong. Over a million houses are bought each year.

There are bigger issues to worry about (like what colour to paint the living room).

TrickyDicky101

Deleted_User wrote: »

I am wondering about this also, I always thought you had 30 days to pay stamp duty. I asked my mortgage provider about this and they said it does not matter to them how the stamp duty is paid the mortgage will still go through. I am wanting to delay my stamp duty by 3-4 weeks after I move in just to help the bank balance a bit rather than pay it out up front straight away especially if I don't need to...

Then you're probably asking the wrong people at your mortgage provider! Did you ask an underwriter?

kingstreet

You need to ask your solicitor if it intends to comply with CML Handbook rule 10.4 if this is one of your lender's requirements.

http://www.cml.org.uk/cml/handbook/englandandwales

10.4 You are only authorised to release the loan when you hold sufficient funds to complete the purchase of the property and pay all stamp duty land tax and registration fees to perfect the security as a first legal mortgage or, if you do not have them, you accept responsibility to pay them yourself.

[Deleted User]

kingstreet wrote: »

You need to ask your solicitor if it intends to comply with CML Handbook rule 10.4 if this is one of your lender's requirements.

http://www.cml.org.uk/cml/handbook/englandandwales

ah well that blows my idea out of the water then, gonna kill me handing over 20k to this government for this ridiculous tax!