Business tax – guidance

Stamp Duty Land Tax: completing the paper return

Guidance on the key forms and the steps you'll need to take and how to avoid common mistakes.

Overview

From 1 April 2015 SDLT no longer applies to land transactions in Scotland. These will be subject to Land and Buildings Transaction Tax.

From 1 October 2014, if you file a Stamp Duty Land Tax (SDLT) paper return using form SDLT1, 3 or 4, you must enter a valid local authority code. Returns which do not include a valid code will be rejected.

Although you can still file paper SDLT returns, there are more benefits in filing SDLT returns online.

Completing the SDLT1

For most straightforward cases, such as simple residential conveyances, the SDLT1 is all you’ll need. You can order the SDLT1 online or by phone.

You send the completed SDLT1 to HM Revenue and Customs (HMRC), together with payment of any SDLT that’s due on the transaction. No other paperwork is needed. For more complicated transactions you may need to complete additional forms.

Each SDLT1 form has its own unique transaction reference number printed on it, so you can only use it for that particular transaction. You can’t use photocopies of the SDLT return for different transactions, see the SDLT1 guidance notes to help you complete the paper return and forms.

Transactions that require additional forms

In some cases you may have to complete extra forms as well as the SDLT return, such as:

  • SDLT2 where there are either more than 2 purchasers or more than 2 sellers
  • SDLT3 where either more than 1 property is purchased or, where only 1 property is purchased but you can’t fit all the address details into the space provided on the SDLT1 form
  • SDLT4 where there’s a complex lease, multiple grants of lease or a complex commercial transaction

Ordering additional forms

You can order forms SDLT2, SDLT3 and SDLT4 online or by phone.

SDLT 2 more than 2 purchasers or vendors

When there are more than 2 purchasers or vendors you’ll need to complete a separate form SDLT2 to give details of additional vendors or purchasers. If the number of additional vendors or purchasers combined is more than 99 you need to complete a schedule for the remainder. The schedule should include all the details requested on form SDLT2.

SDLT 3: more than 1 property

When the transaction involves more than 1 property you’ll need to complete form SDLT1 and form SDLT3 for each additional property. If there are more than 100 properties in total you’ll need to complete a schedule for the remainder. The schedule should include all the details requested on form SDLT3.

SDLT4: complex leases, commercial transactions and some residential situations

You’ll have to complete form SDLT4 as well as form SDLT1 if any of the following applies:

  • the land or property transaction is part of a business sale agreement
  • the purchaser is a company
  • if you’ve asked HMRC for advice on how the law applies to the transaction, using Clearances and Approvals 1 (CAP1), or another route
  • any part of the consideration is contingent or uncertain
  • arrangements have been made with HMRC under the deferment provisions
  • there are mineral rights reserved

You should also check to see if you’ll need to complete this form if the transaction:

  • is the grant of a new lease, or in Scotland, exchange of missives of let
  • relates to the grant of multiple leases

You’ll need to complete an additional form for each lease. If the transaction involves more than 100 properties, you’ll also need to provide a schedule for the remaining properties. The schedule should include all the details requested on form SDLT4 and in SDLT4 guidance notes to help you complete the SDLT4 form.

How to avoid mistakes and delays when completing the paper return

When HMRC receives your SDLT return they’ll check to make sure the information you’ve provided is clear, correct and complete. If anything’s missing, wrong or unclear, they’ll write to you using form SDLT8 for the correct or missing information and will not issue an SDLT Certificate until you’ve provided it.

A benefit to filing your SDLT return online is that the system won’t let you submit the return until it’s correct and complete. Meaning you avoid the risk of missed filing deadlines, penalties and late payment charges that can happen if you make a mistake on a paper return.

Some dos and don’ts when completing a paper SDLT return

You can help make sure your return is processed quickly by following the suggestions below.

Do

  • enter a valid Local Authority code in box 29
  • use black ink and write clearly in block capitals - 80% of errors are caused by the scanner misreading faint or illegible information
  • put the effective date in box 4 of form SDLT1 - this is normally the completion date
  • enter the total consideration payable in box 10 (this box doesn’t apply to the grant of a new lease) - you’ll find more about how to work out chargeable consideration in the section below on getting more help with completing the paper return and forms
  • check that the tax you pay with your return agrees with the amount of tax you’ve indicated is due in box 14
  • make sure that all the purchasers sign the return
  • make sure that when you pay the tax you use the Unique Transaction Reference Number (UTRN) printed on the payslip attached to the SDLT return
  • make sure the section about the purchaser is completed correctly - boxes 49, 50 and 51

Don’t

  • overwrite or use correction fluid if you make a mistake - if you make a mistake you should complete a new form
  • write ‘nil’, ‘n/a’ or ‘none’ in boxes with a £ sign in front of them, you can get help with these boxes in the section below on getting more help with completing the paper return and forms
  • strike through pages, sections or boxes that aren’t relevant to your transaction - just leave them blank
  • complete any other part of box 9 or box 13 if you answer ‘no’ to either of these questions
  • enter part of a postcode in the postcode boxes - please either search on the Royal Mail website or call the Postcode Helpline on Tel: 0845 711 1222 or (if necessary) leave the postcode blank

Find more about working out the chargeable consideration.

When and where to send the return

To allow for possible postal delays, for which HMRC is not responsible, allow at least 3 working days for your return to reach HMRC.

You must send HMRC your SDLT return and any tax due within 30 days of the effective date of the transaction to:

HM Revenue & Customs SDLT
Netherton
Merseyside
L30 4RN

Or you can send it using DX to:

Rapid Data Capture Centre
DX725593
Bootle 9

You shouldn’t enclose any other correspondence with the SDLT return as this will need to be referred elsewhere and may delay the issue of form SDLT5 ‘revenue certificate’.

You should send any other correspondence you have to the Birmingham Stamp Office.

Queries and payments: paper return reference number

You’ll find the UTRN for the transaction in the ‘reference’ box on the payslip. Keep this safe because:

  • you’ll need it to pay your SDLT
  • HMRC Stamp Taxes will need it to recognise and trace your SDLT return and payment if you have a query

Using the right reference number for payments

Even if you don’t file your SDLT return online and you file a paper return instead, it’s still best to pay the SDLT electronically using the reference number shown on the payslip.

If you do pay by cheque, make sure you send it with the payslip from the relevant return - you can’t use the payslip from one return to pay the tax for another return.

If HMRC can’t match your cheque with the correct SDLT return you might have to pay interest.

Read more information about SDLT filing and payment deadlines.