From 1 March 2019, the time limit that purchasers/tenants have to file SDLT returns and pay any tax due will be reduced significantly, from 30 days to 14 days from the effective date of the transaction.
This new time limit will apply to all transactions with an effective date on or after 1 March 2019. The effective date will either be the date of completion or the date the agreement is substantially performed.
If you fail to file your return within 14 days, you will receive a fixed penalty of £100. If you file the return more than three months late, this penalty will increase to £200. On top of these penalties, you will also be charged interest.
HMRC believes that reducing the filing window will improve efficiency. However, there have been some concerns, as completing SDLT forms can be time-consuming, especially in some commercial transactions. For that reason, HMRC is making changes to simplify the return and shorten the number of questions/reduce the amount of information needed.
It has been estimated that the change will affect around 20,000 businesses in England (these changes do not affect the properties in Wales). However, according to HMRC, approximately 85% of SDLT returns are already filed within 14 days.
To ensure our clients do not get caught out by the new deadlines, we will be asking our clients to put us in funds and approve the SDLT forms prior to completion.
If you require further information, please contact a member of our Real Estate, Residential Property or Tax teams.