Stamp Duty Interest and Penalties

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New penalty and interest arrangements

There is a 30 day time limit for getting documents stamped. If you do not present your document to the Stamp Office with the correct amount of duty in the time limit allowed, you can expect to pay a penalty and interest charges.

Penalties apply when you do not present your document on time.

Interest is charged on duty that is paid late.

Why were these changes introduced?

The measures aim to make stamp duty fairer for everyone by encouraging people to pay us the right amount of duty on time. Introducing more realistic levels of penalties and interest charges bring stamp duty in line with other taxes.

What is the difference between penalties & interest?

Penalties will still apply when documents are presented late. Interest is now charged when there is a delay in paying us some or all of the money.

Interest charges arise when the correct amount of duty has not been paid at the appropriate time. An interest charge is made because the Stamp Office has lost out on duty for this period when the money was outstanding. If customers do not pay the Stamp Office on time they will be charged interest automatically, regardless of where the document was executed. Penalties will apply to all documents sent for stamping more than 30 days after the document was executed.

Penalties will be charged on documents executed abroad if they are not presented within 30 days of first being brought into the U.K.

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How much penalty and interest may I have to pay?

If you do not pay us the full duty which is owing within 30 days you will be asked to pay interest.

The amount of interest you pay depends on the duty and the lateness of the payment and a standard rate of interest is applied in working out the charge. The interest is rounded down where necessary to a multiple of £5.

A minimum limit of £25 applies to interest payments and if we work out the amount of your interest as being less than £25 you will not have to pay.

If you submit your document late you should also expect to be charged a penalty:-

  • If your document is less than 1 year late the maximum penalty will be an amount equivalent to the duty or £300 whichever is less
  • If your document is more than 1 year late the maximum penalty you will pay will be an amount equivalent to the duty or £300 which ever is more

Is the maximum penalty always payable?

The Stamp Office has the authority to reduce penalties if appropriate, taking account of any special mitigating circumstances. It is important therefore that you tell us about any factors you consider relevant to the delay when you send your documents to us. The table below gives you details of the way we mitigate penalties.
NB There is no mitigation of interest charges and the full amount will always be payable.

What about documents executed abroad?

Interest is charged on all documents not presented within 30 days of their execution, whether or not the execution was in the UK.

Penalties also apply to documents presented late, as follows:-

If the document was executed in the UK or relates to land in the UK, it will attract a penalty if it is presented for stamping more than thirty days after execution, wherever that execution took place.

If the document was executed outside the UK and does not relate to UK land, a penalty will apply if the document is presented more than 30 days after the document is first received in the UK.

What about interest on late payments of SDRT?

Stamp duty reserve tax applies where there is no executed document. As now, interest will be charged on SDRT which is paid late. This amount cannot be deducted from any income tax liability, nor can it be taken into account in working out any profit or loss for any tax purposes.

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Agreements for lease

When an agreement for lease is presented for stamping at the same time as the lease, we take the date of the lease as being the effective date in working out any penalty or interest. Provided that the agreement and the lease are presented together within 30 days of the date of the lease, and you pay us the correct amount of duty, no penalty or interest is payable.

Penalties on agreements for sale

Up until 1st October 1999 penalties were calculated differently on agreements for sale, which are chargeable under Section 59 of the Stamp Act 1891.

These measures bring agreements for sale in line with all other documents and they are now subject to the same penalty and interest rules.

Penalties and adjudication

When you request adjudication on a document we will provide you with a notice of our decision, telling you the amount of the duty, plus any interest or penalty payment you are being charged. Once you have been issued with this notice of our decision you will be given 30 days in which to make the payment. If you do not get your document stamped within the 30-day time limit you will be liable to a penalty of £300.

How will penalties and interest be shown on documents?

The total amount of duty, plus any penalties and interest is stamped on your document.

We also put a special rubber stamp on your document to show the individual sums you have paid for duty, interest and penalties.

What happens if the interest and penalties are not paid?

If you present your document late without offering us the penalty and interest payments you will be asked to send us these further amounts before we can stamp your document.

If you do not pay us the penalty and interest we are charging, your document will be returned unstamped with any duty you might have paid us. You will be unable to produce your unstamped document as evidence neither will it be accepted for registration.

If you later send the document back to us we will re-calculate the penalty and interest sums from the date the duty originally became due.

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What happens if I do not agree with the amount I am being charged?

If you do not agree with the amount of penalty we are asking you for, you should write to us and let us know why you disagree. You should also provide us with any additional information relating to the delay which will help us in reconsidering your case.

We will then advise you of our decision and your rights of appeal.
N.B. There is no provision for waiving interest charges.

Where should the documents be sent for stamping?

Please send your Pre 1 December 2003 Stamp Duty documents and stock transfers to our Birmingham Stamp Office.

Cheques should be made payable to 'HMRC Only'

Where to go for more information

You can also ring our Stamp Taxes Helpline

If you wish to write to the Stamp Office, please contact our Customer Service office in Birmingham.

Table of mitigated penalties on late stamping

Ad valorem duty cases under one year late

Months late

Up to £300

£305 - £700

£705 - £1,350

£1,355 - £2,500

£2,505 - £5,000

Over £5000

Under 3

NIL

£20

£40

£60

£80

£100

Under 6

*£20

£40

£60

£80

£100

£150

Under 9

*£40

£60

£80

£100

£150

£200

Under 12

*£60

£80

£100

£150

£200

£300

* or duty if less

Ad valorem duty cases over one year late

Months late

under £5,000

over £5,000

under 15

15% of the duty or £100 if greater

20% of the duty

under 18

25% of the duty or £150 if greater

40% of the duty

under 21

35% of the duty or £200 if greater

60% of the duty

under 24

45% of the duty or £250 if greater

80% of the duty

Ad valorem duty cases over two years late

£300 or an amount equal to the duty, whichever is the greater.

Fixed duty cases

under one year late no penalty
over one year late £10
over two years late £25

Fixed duties on documents transferring stock and marketable securities were abolished for documents executed on or after 13 March 2008.

The figures in the tables above will apply in most cases. But in a few instances the circumstances may warrant strict application of the penalty legislation.

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