The 14 day rule
The deadline used to be 30 days. It was cut to 14 days in March 2019 and a surprising number of people, including some professionals, still work to the old figure. For any English or Northern Irish land transaction the return must be delivered and the tax paid within 14 days of the effective date.
Scotland and Wales did not follow. Land and Buildings Transaction Tax returns to Revenue Scotland and Land Transaction Tax returns to the Welsh Revenue Authority both remain at 30 days. If you buy in more than one part of the United Kingdom, do not assume the same deadline applies.
What the effective date actually means
Most of the time the effective date is the completion date, and that is the end of it. But the legislation says the effective date is the earlier of completion and substantial performance, and substantial performance is where problems start.
A contract is substantially performed when the buyer takes possession of the property, or pays a substantial amount of the consideration, usually taken as 90% or more. So moving in early under a licence, or paying the bulk of the price before completion, can start the 14 day clock long before the legal formalities finish. This catches out buyers of new build properties and anyone in a long delayed transaction.
Who is actually responsible
In practice the conveyancer files the return and sends the money, having collected it from you beforehand. In law the obligation sits with the buyer. If the return is late, or wrong, HMRC pursues you and not your solicitor. You may have a claim against the solicitor afterwards, but the tax and the penalty come out of your pocket first.
That matters because conveyancers are not tax advisers. They apply the standard rates from a calculator. They are not required to consider whether first time buyer relief applies, whether the property is mixed use, whether the annexe qualifies as subsidiary, or whether the six dwellings rule helps you. If nobody asks those questions, the default answer is filed and the money is gone.
The penalties
The fixed penalties are modest at first. A return filed up to 3 months after the filing date attracts £100. More than 3 months late and it becomes £200. These apply whether or not any tax was actually due, which is why nil returns still matter.
After 12 months it gets serious. HMRC can charge a tax based penalty on top of the fixed penalty, and that tax based penalty can run to the full amount of the tax shown on the return. On a large purchase that is a very large number, so a forgotten return is not something to leave sitting.
Interest is separate from penalties and runs automatically from the day after the tax should have been paid until the day it is paid, at the official rate set by HM Treasury. There is no de minimis and no grace period.
Returns people forget to file
The most commonly missed return is on a new commercial lease. Tenants tend to assume stamp duty is something buyers pay, but taking a lease is a land transaction. Tax can be due on any premium and on the net present value of the rent, and a return can be required even where the calculation produces nil.
Leases also generate later returns. Where a lease continues after its contractual end date, or where the term turns out longer than originally notified, a further return may be needed. Rent reviews in the first 5 years can also require the figures to be revisited.
Other forgotten ones include transfers of property between connected companies, transfers where a mortgage is taken on as part of a gift, and purchases by partnerships where property moves in or out of the partnership. In each case the absence of a cash price does not mean the absence of chargeable consideration.
Correcting a return after filing
You can amend an SDLT return within 12 months of the filing date, which is the route for most refund claims and most corrections. HMRC in turn has 9 months from the filing date to open an enquiry into the return as filed.
Beyond those windows, HMRC can still raise a discovery assessment where something has been missed. The ordinary time limit for that is 4 years, extending to 6 years where the loss of tax was careless and 20 years where it was deliberate. So an aggressive refund claim made through a percentage based reclaim firm can come back many years later, and it comes back to you.
How to pay
Payment to HMRC is made using the unique transaction reference number from the return, which is the equivalent of a payment reference. Faster payments usually arrive the same day, and Bacs takes 3 working days, so leaving it to the final day of a 14 day window is unwise. Revenue Scotland and the Welsh Revenue Authority have their own systems and their own references.
If you cannot pay, contact HMRC before the deadline rather than after it. Time to Pay arrangements are possible and generally stop further penalties, though interest continues to run.
Missed a return or unsure whether one was needed?
We check what was filed, put right anything that was not, and deal with HMRC on your behalf. Sorting it voluntarily almost always costs less than waiting for HMRC to find it.
Frequently asked questions
How long do I have to pay stamp duty?
14 days from the effective date, usually completion, in England and Northern Ireland. Scotland and Wales both allow 30 days. The return and the payment are due at the same time.
What is the penalty for a late stamp duty return?
£100 if filed up to 3 months after the filing date and £200 if more than 3 months late. Beyond 12 months HMRC can add a tax based penalty of up to the full amount of tax on the return, plus interest.
Do I need to file a return if no stamp duty is due?
Often yes. A return is required for most land transactions even where the calculation produces nil, and the fixed penalties apply to a late nil return in the same way.
Is my solicitor responsible if the return is late?
No. The legal obligation sits with the buyer. HMRC pursues you for the tax and the penalty, even where the conveyancer made the error.
How long can HMRC go back on a stamp duty return?
HMRC has 9 months from the filing date to open an enquiry. Beyond that a discovery assessment can be raised within 4 years, extending to 6 years for careless behaviour and 20 years for deliberate behaviour.