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Deadline for SDLT cut from 30 to 14 days

26th February 2019

Deadline for SDLT cut from 30 to 14 days

Some key changes to Stamp Duty Land Tax come into force on Friday – most significantly the deadline for submitting and paying has been slashed from 30 days to just 14.

Here we take a quick refresher on SDLT and what the changes mean to you.

What is SDLT?

Stamp Duty Land Tax (SDLT) is a land tax governing England and Northern Ireland.  It is payable on many types of land transactions, most commonly by:

  • purchasers acquiring land; and
  • tenants either taking a new lease, or renewing an existing lease

Certain minimum thresholds apply, and SDLT is only payable where the value of the transaction is above that threshold.  SDLT reliefs are also available in some circumstances.

Historically, the deadline for submission of the tax return and payment of the SDLT to HMRC is 30 days from the effective date of the transaction (usually completion).  However, new rules are being introduced from 1 March 2019, to reduce this time frame.

Changes to the submission deadline

The changes reduce the time limit that purchasers and tenants have to file a SDLT return and pay the tax due from 30 days from the effective date (usually completion) to 14 days from the effective date.

The new time limit will apply to transactions with an effective date on or after 1 March 2019, with certain limited exceptions.

Who does it apply to?

This only applies to purchasers and tenants for transactions taking place in England and Northern Ireland, to the extent that transaction gives rise to an SDLT liability, and/or to an obligation to file a tax return. 

The Scottish Land and Buildings Transaction Tax replaced SDLT in Scotland in April 2015, and Land Transactions Tax replaced SDLT in Wales in April 2018.

What is the effect?

The majority of returns are already submitted within 14 days, so this should have a minor effect on purchasers and tenants and will in fact be more of an administrative burden for solicitors and conveyancers, or other professionals engaged in submitting returns on the tax payer’s behalf.

What are the penalties for not paying?

HMRC provides guidance as to the penalties which may be incurred for late filing and payment.  There is an automatic fixed penalty for late filing, and the amount depends on when the return is filed and the SDLT paid. The fixed penalties are:

  • For a late filing of up to 3 months from the filing deadline - £100
  • For a late filing of more than 3 months from the filing deadline - £200

If the SDLT due is paid late, interest is payable from the filing deadline (the date after it was due) until the date it is actually paid.

In addition to the fixed penalty, there is a tax-based penalty if the SDLT is not paid within 12 months after the filing deadline.  This can be up to the full amount of the SDLT which was due to be paid, again.

If you have any queries about any of the above please contact Emma Hadley, or another member of the Property Team.

 

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