Stamp duty land tax Practitioners’ News
Issue 19 – November 2007

Contents

Stamp duty land tax - save time and money – file your returns online

Working with stakeholders and commercial software suppliers, Stamp Taxes has listed the best reasons to file online - as shown below..

Online customers can choose from commercial software suppliers’ products, with differing benefits across the range - including links to Case Management Software, ‘pre-population’ and other benefits. An HMRC product is also available.

Top reasons to file online

1) Electronic SDLT 5
The electronic SDLT 5 certificate is delivered online, usually within moments of successful submission. It can be printed off and sent to the appropriate Land Registry immediately (along with the necessary documents) for registration. Early submission of your online application will also help you to lodge your application with Land Registry within the priority period of any protecting official search.' This means never having to:

  • wait for SDLT 5s in the post again
  • chase-up certificates at HMRC.

2) No SDLT 8
Online filing guarantees that you will never receive an SDLT 8 letter asking for further information. The built-in validation means you cannot submit the return unless all the necessary questions have been answered.

3) Fast and efficient
Notifying online is by far the speediest method of completion. Built-in validation and on-screen guidance means you only answer questions and complete forms (viewable in bite-size pieces) applicable to your specific transaction.

4) Immediate submission
Once you have successfully completed your return online, you simply click the ‘submit’ button and it is filed online.

5) Saves time and money
Online filing can also can save your business time and money in other ways:

  • The risk of penalties for late submission of returns can be substantially reduced. Forms can be prepared pre-completion and submitted immediately after completion has taken place. Payment of tax due can follow on-line submission.
  • You do not need to keep large stocks of up-to-date paper forms and, if you use the automatic UTRN generation facility, you do not need separate supplies of paying-in slips.
  • There is less need to telephone the Helpline or refer to SDLT 6 guidance notes, as interactive help is available on fields, with drop down menus for various codes.

6) Automatic processing of all supplementary forms

7) No need for the client’s signature (however the agent must keep their client’s approval (in whichever form they choose) that the information included in the SDLT Return is correct).

Online filing queries – which Helpline to use

We know that some online customers are not sure which Helpline to call when they have problems:

Online Services Helpdesk (0845 6055999) deals with registration and technical issues including:

  • queries about online messages.
  • timeouts
  • log in problems
  • passwords.

Stamp Taxes Helpdesk (0845 6030135) deals with SDLT queries including:

  • form completion
  • SDLT letters
  • payments
  • questions on SDLT 6 Guidance Notes.

Reviewing ways to file returns:HMRC SDLT CD-ROMs no longer issued (see previous PN)

We are reviewing the filing channels available, to ensure our customers are clear on the options, processes - and merits - of each.

Online filing

The fastest most efficient way to file land transaction returns is to use online filing, available though commercial software providers or Stamp Taxes Online. This method is becoming increasingly popular as more and more agents discover its advantages. Over 4,000 firms have now registered and the submission rate is rising constantly (currently at 38 per cent.) We have been helped in this by Registers of Scotland (RoS) and the Land Registry who are both actively marketing online services. For a list of the top reasons to file your returns online, see the article in this issue.

CD-ROM and other bar-coded channels

These also provide built-in validation and on-screen help. But submissions received using these methods can often be rejected - for a variety of reasons, including:

  • Effective dates of transactions (or other details) altered manually.
  • Barcodes unable to be scanned due to poor printing (lack of ink).
  • Agents copies sent in error.
  • ‘Mixed and matched’ pages – barcodes for one transaction connected to others printed at the same time.

A significant number of 2D barcode returns fail to scan and need to be processed manually. This also occurs with our own CD-ROM. The time taken to put things right causes hold-ups for practitioners (and HMRC) and delays processing the return and in registering the property. It can also increase administration and resource costs in chasing the certificate.

More importantly, because of the development of online filing, the HMRC CD-ROM has not had the benefit of the positive updates that online channels offer. These include:

  • dates from 1 January 1500 allowed for ‘Start of lease’
  • future dates accepted for ‘Start of lease’, to allow a lease whose contractual term begins after the date of the lease (for example a reversionary lease) to be filed
  • the ability to enter surnames with up to 56 characters (rather than 28) (from November 2007).

Future of HMRC CD-ROM and other bar-coded channels

Following consultation with legal practitioner and conveyancing representative bodies, we are planning to withdraw the HMRC CD-ROM completely. Since March 2007, we have been writing to practitioners whose 2D barcoded forms failed to scan, explaining that their returns were manually keyed – and that future failed returns will be sent back.

From 16 July 2007 we stopped issuing new copies of the HMRC CD-ROM. CD-ROM returns that scan successfully are being processed but after 1 November 2007, those that do not will be sent back. From 1 December 2007 we will extend this approach to all bar-coded returns that fail scanning (including those generated by third party software providers) - and customers will need to resubmit on a valid return.

2D barcoded returns were always intended to be used temporarily until online filing went live. Now that this is running successfully we have decided to withdraw the CD-ROM completely and stop accepting bar-coded forms altogether, some time during 2008. We are discussing timing with industry representatives and, as soon as the date is confirmed, we will let you know. We will ensure customers have time to adjust their processes before withdrawal and will provide support for software companies who wish to develop online products. (We have already been in discussion with some of them.)

Because of the undoubted advantages of electronic filing, we would everyone who currently uses the HMRC CD-ROM to consider switching to this method as soon as possible (whether using commercial software products or HMRC Online.)

We realise that the eventual withdrawal of the CD-ROM will have an impact on some practitioners, who may need to make IT changes or re-train staff, for example. To help with this, we are planning a series of Outreach activities promoting the benefits of online filing. Details will be advertised on this website.

We will also be running an online filing awareness campaign. This will include special HMRC website messages as well as letters to customers who have asked for the CD ROM. Those who have requested copies since December 2004 have been contacted and had the reasons for withdrawal explained. They have also had advice about online filing (whether through HMRC or other providers) and how to register and enrol. CD-ROM customers who want to do this should telephone 0845 6055999.

Stamp Taxes Online: send the online certificate to the land registries - not the ‘submission successful’ message

We know that some customers are incorrectly submitting the online ‘submission successful’ message to land registries (rather than the online certificate.) Its subsequent rejection is causing delays.

The problem is compounded because the online certificate generated using Stamp Taxes Online is deleted from the online system after 30 days. This means that if a customer tries to access the certificate after that period, it is no longer there. Paper copies are then required - and the time taken to request them by phone and receive them by post leads to further delays. Certificates generated by third party software providers may be stored for longer periods or stored on the user’s computer system automatically allowing easy retrieval should the need arise.

It is imperative that the certificate (PDF 204K) is printed off shortly after receipt, so it can be sent to the appropriate land registry for registration purposes. If a permanent record is required, the certificate can be downloaded to users’ own systems.

How to access the certificate

Note: The following procedures apply only in respect of online certificates generated by Stamp Taxes Online, not those generated by third party software providers

When the ‘Submission Successful’ message is received:

  • Select the ‘View & save the submission receipt’ button (at the bottom of the page).
  • A ‘Privacy Guidance’ page will appear.
  • Read the guidance.
  • Select ‘View & save the submission receipt’.
  • The Submission Receipt (online certificate) will appear.

There are two buttons at the bottom of the page:

  • Print receipt.
  • Save the receipt.

Select the appropriate option and/or both in turn.

If you do not access the receipt but go into the system later to do this:

  • Select ‘Submitted Returns’ from the left hand navigation bar.
  • Select the return that the submission receipt is required for.
  • Select ‘Submission Receipt’ in the left hand navigation bar.
  • A ‘Privacy Guidance’ page will appear.
  • Read the guidance.
  • Select ‘View & save the submission receipt’.
  • The Submission Receipt/online certificate will appear.

There are two buttons at the bottom of the page:

  • Print receipt.
  • Save the receipt.
  • Select the appropriate option and/or both in turn.

Remember – you have only 30 days from submission to print and save the online certificate if you are using Stamp Taxes Online.

Stamp Taxes Online – ‘system busy’ messages

We know that some users are receiving ‘system busy’ messages after accessing the online service. If you get this:

  • log out
  • close the browser
  • log back in again.

We hope to resolve this issue as quickly as possible. In the meantime, please accept our apologies for any inconvenience caused.

Stamp Taxes online filing - procedure for making payment/submitting plans and schedules

There are still a small number of transactions that cannot be dealt with online and for which hard copy returns must be completed. Generally, if a return cannot be dealt with online, the paper return must be sent to the Birmingham Stamp Office along with any payment of the SDLT and any accompanying plans and schedules of occupational lease. (See separate article in this issue).

However, if the software system you use automatically generates a UTRN rather than you manually including a UTRN from a payslip, then you must send payment to Netherton without a payslip, but with the UTRN written on the front or back of the cheque. The cheque should not be sent to Shipley.
If any cheque is sent for multiple payments, the tax should be apportioned to appropriate UTRNs, listed on the back of the cheque. If the software system you use requires a UTRN from a payslip then submit the cheque with the associated payslip to the Accounts Office in Shipley.

Hard copy SDLT Returns (together with any schedules/maps) must continue to be sent to Netherton unless they fall within a limited category of returns that must be sent to the Birmingham Stamp Office for processing (See separate article in this issue)

You can now make one composite payment covering multiple transactions using CHAPS. Please contact AOS for advice on how to register for this scheme.

Stamp Taxes Online – no more paper certificates

Online filers used to receive both an electronic SDLT5 certificate and a paper certificate by post. But since 4 August 2007, paper SDLT5 certificates are no longer issued for online returns.

This means it is even more important to safely store your successful submission receipt (electronic SDLT5) once you have viewed it. It can then be printed off at any time and sent to the Land Registries along with the appropriate documents.

If, under special circumstances, you later require a paper SDLT5 certificate please contact our Stamp Taxes Helpline.

SDLT Team reaches out to customers

Stamp Taxes will be joining other HMRC tax specialists at a series of open days to be held across the country during the next six months. The aim is to promote online filing services and advisers will be on hand to answer questions on the varying products.

If you are interested in attending future events, see locations and dates below. You can simply attend on the day, or get more details from Rachel Varndell in advance. Details of the remaining open days are also available on our website.

 

Date

Event

Name

Where

20/11/2007

Scarborough

Business Advice Open Day

Spa Complex, South Bay

22/11/2007

Hull

Business Advice Open Day

Kingston Community Centre

13/03/2008

East London

Business Advice Open Day

Britannia Hotel Docklands

Stamp Taxes Online Reference Number (STORN)

Some customers have said they find the format of the Stamp Taxes Online Reference Number (STORN) confusing - and that they are unsure of its purpose.

The STORN is generated when a customer registers and enrols for the online service. It allows the Online Serves Helpdesk (OSH) to track submitted transactions if there are any queries.

The STORN appears on screen as (for example) 5*4*3*2*1*. When quoting the number, simply remove the asterisks. In this example the STORN is 54321.

Stamp Taxes Online - transactions that cannot be filed online should be sent to Birmingham Stamp Office

SDLT Returns relating to the following types of transaction should continue to be referred either directly, or after contacting Stamp Taxes Helpline, to Birmingham Stamp Office.

Non Residential Transactions

  • Disadvantaged Area Relief is being claimed for cases where the contract has been entered into and substantially performed on or before 16 March 2005.

Code F and A only

  • Notification of Completion following notification of Substantial performance of a freehold sale or leasehold assignment – This is in a letter format to be sent to Birmingham Stamp Office. Note that completion of a lease following substantial performance of an agreement for lease should be notified on a normal return submitted online or by hard copy to Netherton.
  • Returns under Section

    80 - This is a second notification relating to contingency cases or when consideration is ascertained

    81 - Notification of a relief being withdrawn as a ‘disqualifying event’ has taken place

    81A - A later linked transaction being notified
    Schedule 17A Paragraph 3&4 to the Finance Act 2003 - The term of a lease is ascertained

    Schedule 17A Paragraph 8 to the Finance Act 2003 - Where unknown rent has been ascertained
  • More than one hundred properties (Stamp Taxes are working to extend this in a future upgrade release.)
  • More than one hundred and three purchasers and vendors (of any combination)
  • Old leases and assignments which commence before 01/01/1500

Please note for multiple lease transactions

HMRC online software is unable to evidence multiple lease transactions, unless the user completes separate returns for each lease and declares a link between each return.

However, some commercial software providers can provide the facility of multiple lease acquisitions on the one return.

Land Transaction Returns – amendments made over the telephone

Stamp Taxes Helpline advisers and staff in Stamp Offices can now amend SDLT1 Returns over the telephone – whether or not the SDLT 5 certificate has been issued. Amendments made by the Helpline will not be confirmed in writing - the call is recorded and can be tracked if necessary.

Form SDLT60 – certification that no return is required

A reminder that, In England and Wales, the SDLT60 should always be sent to the HM Land Registry office serving the area where the land is situated (rule 15(3)(a) of the Land Registration Rules 2003) where there is an associated Land Registry application. (See previous PN). It is not necessary to send the SDLT60 to the Land Registry where you do not have an associated Land Registry application (for example the surrender of an unregistered lease for no chargeable consideration).

A list of the administrative areas in England and Wales, with their respective Land Registry offices is published in Practice Guide 51 – Areas served by Land Registry offices, available from any Land Registry office or from their website.

An easy to use online 'office finder' is available.

In Scotland, the SDLT60 is never sent separately from the application, so the question of which office it should be sent to does not arise.

SDLT Cheque payments – include the Unique Transaction Reference Number (UTRN)

Please remember that, whether filing returns online or submitting hard copies, the UTRN for the transaction as shown on the SDLT1 should always be included on the front or back of cheques for SDLT payments. If you send a cheque with a covering letter, you must put the UTRN on both - because they are separated during processing.

SDLT1 Return – question 55 (‘Are you acting as a trustee’)

This question is often (incorrectly) left blank, when a ‘Yes’ or ‘No’ answer is required. We would be grateful if practitioners could check that this is done, to avoid SDLT 8 letters being generated.

Processing of unsigned or returned cheques

Any cheque that cannot be honoured (including those that are unsigned) will no longer be routinely returned to the drawer. Instead, an SDLT 12 underpayment notice will be issued, requesting the outstanding tax. To avoid this happening, please ensure that cheques are:

  • made payable to HM Revenue & Customs
  • signed
  • dated
  • noted with any Unique Transaction Reference Number on the front or the back of the cheque.

Send correspondence previously dealt with in Manchester Stamp Office to Birmingham

Please remember that all correspondence previously sent to Manchester Stamp Office should now be sent to Birmingham Stamp Office. (See previous PN)

SDLT1 Returns (together with any supplementary forms) should continue to be sent to HMRC SDLT Netherton Processing Centre - or filed online unless they fall within a small category of transactions that are dealt with by the Birmingham Stamp Office (See separate article in this issue)

Stamp Taxes Helpline

Callers from overseas can now contact the Stamp Taxes Helpline on our international telephone number: +441726 209 042.

The Welsh Language Act 1993

Welsh versions of our standard SDLT forms can now be viewed on our website. (See PN 16) Printed versions are also available from the Welsh Language Helpline.

SDLT 6 Guidance Notes have now been written for screen reading, allowing full Internet navigation. There is a typing error in the latest printed version (August 2007)

A new HTML version of the SDLT 6 Guidance notes is now available. This is the most up-to-date guidance, as it is regularly amended as things change. It allows you full internet navigation (unlike the PDF version) and links to the relevant parts of the SDLT Manual.

Printed versions of the SDLT 6 are available from the HM Revenue & Customs Orderline. This is updated once a year, the latest changes were made in August 2007.

We are sorry, but there is an error in the latest printed version of the SDLT 6.
In SDLT 1, question 3 on page 22 ‘Interest transferred or created’ the code should be LG not LF for long leasehold at a ground rent or nominal rent with vacant possession. We are currently working with the printers to correct this.

Ordering printed versions of the SDLT6 Guidance Notes

The HM Revenue & Customs Orderline has recently noticed a rise in requests for multiple copies of the SDLT6 Guidance Notes. It appears that many practitioners are sending the guidance to clients every time they send an SDLT1 Return out for signature.

This was raised at a recent Working Together Guidance & Communications sub-committee meeting and the general consensus was that it should not be necessary to do this. In the majority of cases we know that agents complete SDLT Returns for clients before sending them for signature. In these circumstances, we would ask you to consider carefully whether you clients actually need the guidance notes.

We would also suggest that, as the printed Guidance Notes are only updated annually, it is sensible not to place a bulk order but to spread your requirements throughout the year. Please remember that the online SDLT6 Guidance is updated monthly.

Stamp Taxes Re-organisation

As part of our drive to improve customer service, we are continuing to concentrate our work in fewer locations in 2007/08, and centralise in Birmingham. By doing this - and with customers’ help in making some minor process changes - we aim to provide a faster, more efficient service.

Telephone contact

You should always call our Helpline for all Stamp Taxes enquiries. Now that we have extended our Helpline to two sites and, (since the end of May 2007) doubled the number of telephone advisers, customers should be able to get through quickly and without difficulty.

Postal contact

To help us deal with transactions faster and more efficiently, we are now asking customers to make all postal contact with us through Birmingham Stamp Office This includes correspondence on complex transactions (previously carried out in Manchester.)

To ensure all Birmingham’s post is sorted promptly and is quickly referred to the relevant team, it would be extremely helpful if you could mark correspondence with:

  • the topic: examples given below
  • any reference number.

 

Stamp duty land tax (SDLT)

Topic

Please mark as

Financial enquiries

SDLT Finance

Transactions with more than 100 properties

Multiple Properties

Completion following substantial performance (code F & A only)

Substantial performance

Assignments of old leases / transfers subject to old leases prior to 1/1/1500

Old leases

Returns under Section 80, 81 and 81A Finance Act 2003

Section 80, 81, 81A FA 2003

S80/S81/S81A Returns under Schedule 17A Finance Act 2003

Sch17A FA 2003

Returns relating to cases of contingent or uncertain consideration where tax has been deferred under FA03/S90

SDLT Deferment
Application in the form of a letter

Request for information and advice - Code of Practice 10

COP10

Online filing

Of course, if you use online filing, you may not need to contact us by post or telephone. We will continue actively to promote this as the fastest, most efficient way of submitting land transactions returns.

We will post further updates on Stamp Taxes reorganisation on our news page.

Previous issues of the SDLT Practitioners’ Newsletter

Information in earlier Practitioners' Newsletters was current at the time of publication but may become outdated or incorrect with the passage of time. Such material should not be relied on as a permanent source of guidance.

We do not retain hard copies of previous issues, but they are all available on this website.

To ensure only current information is held on our website, we removed issues over 12 months old in September 2007. In the unlikely event that old Newsletters are required, you can get them from Des Newman

Quick Links

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