A property specialist is warning about “modern day ambulance chasers” who try to convince buyers they have paid too much stamp duty.
“An increasing number of firms are contacting homebuyers after completion, suggesting they have been overcharged SDLT and are therefore eligible to claim a refund,” explains residential property search professional Kate Bould, who is managing director of the consultancy Index West Midlands Property Information.
“These firms are the modern-day ‘ambulance chasers’ and in my view, predators that are capitalising on the buoyant property market triggered by the SDLT holiday period, and exploiting the improved knowledge of SDLT in its wake” she says.
Bould suggests that conveyancers should be extra-vigilant with stamp duty calculations, and should carry out due diligence if approached by any apparent stamp duty specialist querying payments.
“Information about every commercial and residential property transaction is published and available on the Land Registry website, and being used by this new breed of companies as a source of potential work.
“Using it, these SDLT refund businesses identify potential overpaid SDLT, contact the purchaser to suggest a miscalculation has been made, and then offer their help to claim a refund - for a substantial fee, often pitched as on a ‘no-win, no fee’ basis.
“Unsolicited approaches are pretty much always too good to be true and homebuyers should be told to act with caution and check independently whether a refund is due.”
To date, there have been 49 releases of tax considerations relevant to SDLT and Bould believes conveyancers shouldn’t rely solely on the online SDLT calculator.
“As well as the homebuyers, solicitors are exposing themselves to risks if a property is mis-classified and the SDLT payable to HMRC miscalculated" explains Bould.
“Outsourcing SDLT checks and calculations to a registered SDLT specialist is a personal choice, but SDLT is complicated and sometimes reliefs are overlooked, so using an independent is strongly recommended.”
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Given recent experiences with conveyancing firms, I'm not sure I trust them to be able to calculate their fee accurately let alone understand the laws around SDLT.
If you increase a tax from 4% to 17% in a little over 10 years you can probably expect some pushback!
If there is no cost obligation, why wouldn't anyone want their position assessed? Stamp Duty can be quite complicated. When you see these warnings, it's generally a ruse to stop people venturing down this path.
Absolutly correct... I imagine there would be some red faces and explaining to do in a few conveyancing offices if it was discovered that their solicitors had misscalculated the SDLT owed...
We rang 3 separate solicitor firms in an attempt to clarify the stamp duty on a complicated sale and purchase and got 3 completely different figures! Why wouldn’t you double check with a third party company (so long as it’s free to check)?
It’s not for the Solicitor to advise on SDLT - if the Buyer’s particular circumstances are not clear and obvious then we ask the buyer to take independent Tax advice from a suitably qualified person. Conveyancers do NOT advise on a person’s individual Tax circumstances.
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