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Stamp Duty Land Tax: Appeal Against a Late Filing Penalty!

Published by Susan Basnet
Posted Date: June 10, 2024 , Modified Date: June 13, 2024

Have you recently received a letter from HMRC notifying you of a penalty due to late filing? Suppose you have valid reasons that hindered your ability to file on time. In that case, you have the right to appeal against the late filing penalty.

This article explores the circumstances under which penalties occur and when HMRC accepts appeals.

When Should an SDLT Return be Filed?

Stamp Duty Land Tax (SDLT) is a tax charged by HMRC on the purchase of property or land in the UK. When a transaction is completed, HMRC must be informed of the purchase using a Stamp Duty Land Tax (SDLT) return within 14 days from the transaction's effective date, i.e. usually the transaction completion date, even if there is no SDLT due.

The payment deadline is the same as the return and should be paid as soon as the return is submitted.

When do Penalties Occur?

Failure to file your return by the filing date incurs an automatic fixed penalty. The penalty amount varies based on the lateness of your filing:

  • £100 if you file your return up to three months after the filing date.
  • £200 if you file your return more than three months after the filing date.

Additionally, if you fail to file your return within 12 months after the filing date, you will face an additional tax-based penalty, up to the amount of SDLT due on the transaction.

Along with the penalty, interest is also charged by HMRC on the potential lost revenue, i.e. unpaid SDLT from the date it should have been paid to the actual date of payment.

When HMRC imposes a penalty, you receive a formal penalty notice instructing you to pay within 30 days of the decision letter i.e. the formal penalty notice from HMRC.

Can I Appeal Against a Late Filing Penalty?

Yes, if you disagree with HMRC's penalty notice, you can appeal against it within 30 days of receiving the formal notice. You must also provide valid reasons for your disagreement.

Appeal Procedure

Although you cannot appeal against the interest charged by HMRC, you can appeal against the penalty using the form SDLT46, providing details of the purchase, your agent (if any), the penalty amount, and the reason for the appeal. The appeal must be lodged within 30 days of receiving the original penalty notice.

Stamp Duty Land Tax Appeal Against a Late Filing Penalty!

Although the law mandates that you must appeal within the time limit, HMRC may consider a late appeal if there was a reasonable excuse for not appealing within the time limit and you lodged the appeal as soon as possible after that.

The appeal must be sent via post to the following address:

HM Revenue and Customs

BT - Stamp Duty Land Tax

BX9 1HD

United Kingdom

Warning: Even if you're appealing against the penalty, it's advisable to pay it promptly. If you do not pay and lose the appeal, you'll be charged interest on the late penalty payment. However, the penalty and the interest is refunded to you if the appeal is successful.

It is also crucial to understand that it's your responsibility to convince the HMRC of the reasonableness of the reasons for the delay. A reasonable excuse can be an unexpected event or circumstance beyond your control that prevented you from meeting the deadline. The next segment of the article looks at what could be considered a reasonable excuse.

Reasonableness of the Reasons for Delay

To be considered reasonable by HMRC, you must demonstrate that you took all reasonable steps to file your return promptly. Examples of reasonable excuses include a fire or flood at the post office handling the return, serious illness, or death of your adviser.

However, circumstances like difficulty completing the return or work pressure is not accepted as reasonable excuses.

If HMRC accepts your excuses as reasonable, they cancel the penalty. However, if they disagree, you can either accept their decision or appeal to the tribunal service for a hearing.

Conclusion

In conclusion, if you receive a late filing penalty for Stamp Duty Land Tax (SDLT) from HMRC, you can appeal within 30 days of receiving the notice. Complete form SDLT46 with valid reasons for your disagreement and submit it promptly. Demonstrating the reasonableness of your excuses for the delay is crucial. With a successful appeal, you can seek a resolution and potentially avoid or mitigate the penalty imposed by HMRC.

Need expert advice on SDLT and taxation in the UK?

Contact us today for efficient and
hassle-free assistance.

Susan Basnet
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