Penalty letter responses

We have recently reviewed the instances where penalties have been charged/raised for late submission of SDLT Returns. Our research has shown that, in many cases, penalties for late returns could easily be avoided. Here are some tips to avoid delays:

  • Make sure returns have the correct Effective Date:

    • The effective date is normally the completion date of the transaction (whether or not a document shows this.) But if a contract is substantially performed before completion, the date that ‘substantial performance’ takes place is the effective date.
    • When entering the effective date, ensure you have included the correct month and the correct year (particularly at the beginning of a new year)
  • Don’t make manual changes to bar-coded forms

A final copy of a bar-coded return should only be printed-off once all necessary data (including the effective date) has been entered. If the form is printed-off and manual amendments or entries (of any kind to any field) are made later these will not be picked up by the scanner and will not be captured.

Speed up the filing process

Returns can be printed before the effective date is known and signed by purchasers, to confirm all other data. If the purchaser authorises their agent to do so, they can sign the final copy and confirm the effective date.

  • Don’t leave it till the end of the 30 day period to send the return back If the return is posted towards the end of the statutory ’30 day period’ (after the effective date of the transaction) and no allowance is made for postal delays, customers run a higher risk of receiving a penalty notice.
  • Notify us of all transactions – except in cases where self certification (SDLT60) (PDF 38K) is acceptable.
  • When sending SDLT60s direct to the appropriate Land Registry, make sure this is done in good time. If HMLR reject the form for any reason, customers will need time to re-submit.
  • Make sure the minimum information required is provided Without this information SDLT1 Returns cannot be processed, so are not regarded as received. They will be returned for completion, which will add to the timeframe.
    The minimum information required is:
    • UTRN
    • Effective date - question 4
    • Address of property - question 28
    • Purchaser’s address - question 54
    • Signature (usually the purchaser’s)
  • Make sure the purchaser is available to sign the return We expect the purchaser to submit the land transaction return within the deadline. Although the purchaser’s agent cannot it in their own right, they do have the option of obtaining a Power of Attorney to do so. The agent must indicate they are signing in that capacity within box 71, by writing ‘Power of Attorney’ underneath their signature. (The Deed of Attorney does not need to be submitted with the land transaction return.)
  • Make sure the liable person is aware of their responsibility to pay the penalty, even if their agent was acting on their behalf The purchaser is deemed to be the ‘liable person’, who is responsible for making a land transaction return and paying any SDLT due within 30 days of the effective date of the transaction. This includes any penalty or interest due.
  • Don’t assume that because there is no tax to pay that no penalty will be charged

A purchaser who fails to deliver their return by the filing date, is liable to:

  • a flat-rate penalty of £100 if the land transaction return is delivered within three months after the filing date
  • £200 in any other case

This flat-rate penalty is charged whether or not the transaction attracts SDLT or relief has been claimed.