Penalties for late land transaction return

HMRC issues stamp duty land tax penalties if you file the SDLT return late. They may also file defaults in return or when you fail to maintain the records. It would help if you informed the HMRC about many Northern Ireland and England property transactions. If you are confused about the procedure, you can hire property tax lawyers.

You should use a stamp duty land tax return within 14 days from the transaction date. You must get this done even if you do not owe any tax. The effective date refers to the date that provides complete transfer. However, the date of the contract can be substantially performed.

If we do not provide the transaction on time, you will need to pay the penalty.

Penalties for late land transaction return

When should you file the land transaction return?

The stamp duty land tax SDLT is extremely crucial. The land transaction return needs to be delivered so that it can be received within the filing date. After the date of transaction is completed, the return should be placed within 14 days. The effective date for filing the return usually stands for the date of completion irrespective of what the document shows.

You must exercise the document before completing. The date for substantial performance will eventually start acting from the effective date. It is advisable that you’re familiar with what substantial performance is. The substantial performance is when the purchaser possesses the property and you have paid the rent for the first payment. Furthermore, it will also be applicable for pre-emption. It will also be considered to be substantial performance when the payment of a considerable amount for the same is made.

What are the common mistakes?

Even when you have a property tax lawyer, there are chances that you may make a mistake. You must inform everything about the SDLT to your accountant. They will analyse the present value of the residential properties. You must file the SDLT to HMRC. Furthermore, it is crucial that you pay the taxes within 14 days. If you don’t make the payment, there will be penalties.

The amount of SDLT that you need to pay will depend on various factors. Therefore, you must also try to understand if you will be eligible for the SDLT relief. Your solicitor can only help you understand the considerable issues. Furthermore, this will help to avoid any problems in the future.

What is the penalty for late payment of stamp duty?

You will be fined a fixed penalty of £100 if you fail to file the return upto 3 months from the due date. After that, you will be charged around £200. Furthermore, you may also need to pay interest for the SDLT owed from the day of purchase till the day you pay it off. If you don’t file the return within 12 months, you will need to pay the tax-based penalty. As a result, you may need to pay double the original or real amount of the SDLT.

If you are charged for penalty, the respective body will share a formal penalty notice with you. The penalty amount must be paid within 30 days from the date of notice. If you fail to pay the penalties on time, you may need to pay the interest charges as well.

What will happen when I get the penalty notice?

As soon as you receive the penalty notice, you must send the land transaction return as soon as possible. The legal way to proceed with it is to make the payments for land transaction on time. If you do not pay the penalty on time, it can cause huge problems. Furthermore, this will also be helpful for avoiding future penalties and interest charges.

It is advisable that you calculate the amount. The notice will contain information about the calculations, so you must verify the information. There is a section for tax-based penalty which will be imposed that will be written to you. Furthermore, it will also contain details on how everything is calculated. Therefore, you must verify the information and then proceed with it.

If the taxpayer is dead who should be submitting the land transaction, and you’re acting on their behalf, you must provide details to the HMRC. It is advisable that when you submit the transaction return, you mention the date of the death of taxpayer and the reason for which penalty is charged. Furthermore, since you will be paying on the dead taxpayer’s behalf, you must provide your personal details.

Can you appeal against an SDLT penalty?

The appeals can be made against a late filing penalty. You need to provide a reasonable excuse for the same. It is advisable that you showcase then that you have been in an unforeseen situation that prevented you from filing the return on time. There are various examples that you may need to consider. Some of the common scenarios under which you can file the appeal include the following:

  • Industrial action.
  • Technical or software glitch.
  • Lost or delayed in post.

While you provide these reasons as a justification, you also need to prove everything in your power that your filing the returns appropriately. It is advisable that you file the returns as soon as possible. If you fail to do it, you must provide a reason for it.

According to the HMRC, you are not eligible for making appeals against the interest that will charged on the late payment. If you can provide a legitimate reason as to what led to the late payment, you may be able to avoid it.

Late appeals

The time limit for making the appeal against the decision is usually 30 days from the date of decision. As per the law, you must make an appeal to the HMRC only after the limit. They may accept the late appeal when you provide a justified reason. There is no specific information as per the law as to what the reasonable or acceptable excuse is.

If you are to file the SDLT return, you need help of professionals. They can assist you in the process of land transaction. You might as well be able to file the appeal. Reaching out to professional solicitors can however be of great help in filing the appeals. They will also help you in fixing the amends and prevent you from being overcharged or late penalties.

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