Policy paper

Changes to the Stamp Duty Land Tax filing and payment time limits

Published 6 July 2018

Who is likely to be affected

Purchasers of land in England and Northern Ireland, and conveyancers and other agents who submit Stamp Duty Land Tax (SDLT) returns and make payments on behalf of purchasers.

General description of the measure

The measure reduces the time limit that purchasers have to file a SDLT return and pay the tax due from 30 days to 14 days. The new time limit will apply to transactions with an effective date on or after 1 March 2019.

Improvements will also be made to the SDLT return and these will be in place when the new time limit begins.

Policy objective

Shortening the time limit to file the SDLT return and pay the tax due will not change liabilities for the purchaser, but it will improve the efficiency of the SDLT system. The majority of returns are already filed within 14 days of the transaction.

Background to the measure

At Autumn Statement 2015, the government announced that the time limit for filing a SDLT return and paying any tax due would be reduced from 30 days to 14 days during 2017 to 2018.

A consultation document Stamp duty land tax: changes to the filing and payment process was published on 10 August 2016 and the government’s response document was published on 20 March 2017.

At Spring Budget 2017 it was announced that the changes would be delayed to give HMRC time to address the issues raised in the consultation. Autumn Budget 2017 announced that the changes would be implemented with effect from 1 March 2019.

Draft legislation was published for consultation on 6 July 2018.

Detailed proposal

Operative date

The 14 day time limit for filing a SDLT return and paying the tax due will apply to land transactions with an effective date on or after 1 March 2019.

Current law

Part 4 Finance Act 2003 contains the main SDLT filing and payment provisions.

Section 76(1) requires a SDLT return for every notifiable land transaction, before the end of 30 days after the effective date of the transaction.

Section 86(1) requires the SDLT to be paid no later than the filing date for the return.

Section 87 contains provisions for charging interest on unpaid tax.

Other provisions require a return to be filed and any tax due, to be paid, where a land transaction was not initially notifiable, but becomes so, as a result of a later event. These are:

• section 80(2) which requires a return in cases where the consideration for a purchase was uncertain or contingent on a future event and the contingency ceases or consideration is ascertained
• section 81A(1) which, in consequence of later linked transaction, requires a return for an earlier transaction
• Schedule 17A paragraphs 3(3), 4(3) and 8(3), which requires returns in relation to certain types of leases

There are also provisions that require a further return to be filed, where as a result of a later event, further tax becomes due. These are:

• section 80(2) in relation to a contingency that ceases or consideration that is ascertained
• sections 81(1), 81(A) and 81ZA , where certain reliefs are withdrawn
• section 81A(1) in relation to linked transactions
• Schedule 6B paragraph 6 (3)(a) which concerns an event that occurs after a claim to multiple dwellings relief
• Schedule 17A paragraphs 3(3), 4(3) and 8(3) which concern cases involving certain types of leases

These further returns are submitted in the form of a letter.

Provisions relating to filing and payment where an application to defer tax has been made are in Part 4 of the Stamp Duty Land Tax (Administration) Regulations (SI 2003/2837). Details relating to the SDLT return forms are in Schedule 2 of those Regulations.

Proposed revisions

Legislation will be introduced in Finance Bill 2018-19 to amend Finance Act 2003. These amendments will reduce the time limit for fling a SDLT return to 14 days, in relation to transactions that are or become notifiable. Therefore revisions will be made to:

• section 76(1): return for a notifiable land transaction
• section 80(2): return in cases where contingency ceases or consideration is ascertained
• section 81A(1): where in consequence of later linked transaction, a return is required for an earlier transaction
• schedule 17A paragraphs 3(3), 4(3) and 8(3): returns in relation to certain types of leases

The current 30 day filing and payment time limit will continue to apply where a further return is required.

The provisions on time limits to pay SDLT are linked to the filing time limit provisions, and therefore will not need to be amended.

The provision at section 87 regarding interest on unpaid tax will be amended, to ensure that interest will run from the end of 14 days or 30 days, whichever time limit applies.

Amendments to SI 2003/2837 in relation to the filing and payment provisions where an application has been made to defer the payment of tax and the changes to the SDLT returns will be made by Regulations later this year.

Summary of impacts

Exchequer impact (£m)

2017 to 2018	2018 to 2019	2019 to 2020	2020 to 2021	2021 to 2022	2022 to 2023
-105	+100	negligible	negligible	negligible	negligible

These figures are set out in Table 2.2 of Autumn Budget 2017 documents and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2017.

Economic impact

These figures are set out in Table 2.2 of Autumn Budget 2017 documents and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2017.

Impact on individuals, households and families

This measure is likely to directly affect fewer than 500 individuals (and households) per year, who file their own SDLT returns without using an agent. The impact is expected to be negligible.

One off costs include familiarisation with the new time limit. It is not expected that there will be any on-going costs as the obligation to file a SDLT return is unchanged.

The measure is not expected to impact on family formation, stability or breakdown.

Equalities impacts

It is not anticipated that there will be any impacts on groups with protected characteristics.

Impact on business including civil society organisations

This measure will affect approximately 20,000 businesses, including small and micro businesses who are mainly licenced conveyancers and solicitors. These businesses act for individuals and companies in filing SDLT returns and making payments on their behalf.

The impact on admin burdens is expected to be negligible. One-off costs include familiarisation with the new time limits. On-going costs may include amending systems and/or processes to ensure returns are filed and payments are made within the 14 day deadline. However, many businesses already file and pay within 14 days.

Furthermore, the improvements to the SDLT return will help these businesses comply, particularly as, where complex purchases involving leases, less information will be required.

There is no impact on civil society organisations.

Operational impact (£m) (HMRC or other)

HMRC will incur costs of approximately £600,000 in making changes to IT systems to implement this measure. The changes include reducing the filing and payment time limit to 14 days and improving the SDLT return to make compliance easier.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

HMRC will continue to review how the policy on filing and payment time limits operate in practice, through review of correspondence with taxpayers and their agents, and liaison with stamp taxes practitioners.

Further advice

If you have any questions about this change contact:

• Anne Berriman on telephone: 03000 585901, or email: anne.berriman@hmrc.gsi.gov.uk
• Jane Ewart on telephone: 03000 585790, or email: jane.ewart1@hmrc.gsi.gov.uk