Cold calls from rogue tax repayment agents advising new homeowners to make speculative Stamp Duty Land Tax (SDLT) refund claims, which could result in large tax bills, are being warned.
The warning follows a recent rash of Stamp Duty refund claims to HM Revenue and Customs (HMRC) that did not meet very specific criteria.
The agents have been known to call new property owners after discovering them through Land Registry records and property search websites, offering money back for ‘unknowingly overpaid’ Stamp Duty.
According to a recent HMRC analysis, up to one-third of claims for’multiple dwelling relief’ refunds were incorrect.
HMRC will investigate these claims, but only after the agent has taken their fee, leaving the homeowner to pick up the difference. Incorrect refund claims must be repaid with interest, and some may also face penalties.
Nicole Newbury, Director of Wealthy and Mid-sized Business at HMRC, stated:
“We are seeing clearly bogus refund claims that will never be successful but will result in an unnecessary bill for the customer.”
As a result, we are warning new homeowners not to be taken in by tax repayment agents who promise easy money on a ‘no win, no fee’ basis.” If something appears to be too good to be true, it most likely is. We want to assist people in getting it right and avoiding unnecessary tax bills, so treat promises with care.
Anyone approached about a Stamp Duty refund claim should first consult with their original conveyancer, then seek independent professional advice and review HMRC’s guidance by searching ‘Stamp Duty Land Tax’ on GOV.UK. You can also reach us by phone at 0300 2003 510.
In one recent case, a rogue agent suggested that a homeowner had overpaid £60,000 in Stamp Duty. Despite the fact that the house is clearly only one, the agent claimed it could be designated as two properties. This is not an isolated case; consider the following:
A claim that a bedroom could be considered a separate dwelling and eligible for’multiple dwellings relief’ because it had an en-suite and a built-in wardrobe that could be used as a kitchen if a microwave and a kettle were added.
A person who claimed their house was not entirely residential because a paddock behind the garden was occasionally used to house a neighbor’s horse. The agent informed them that they were entitled to lower stamp duty rates because the presence of the paddock made the transaction a mix of residential and non-residential property, resulting in a lower Stamp Duty payment. A new owner of a six-bedroom home claimed that it was not entirely residential because a room above a detached garage was used as an office.
