Under current guidelines from HMRC, solicitors and licensed conveyancers may file stamp duty land tax returns on paper or online as they choose, with payments payable electronically or by cheque. However, the paper payment option is set to be removed in the near future, while the payment window is set to be reduced from the current 30 days to 14 days by 2018 under plans announced in the 2015 Autumn Statement.
If implemented, these new requirements will represent a significant change for many solicitors and conveyancers who still file over 31,000 paper returns each year.
Why change the current system?
As part of HMRC’s consultation document on plans to abolish paper filing, it was revealed that as many as 4 in 10 of paper returns currently contain errors. These can vary from unanswered questions to answers that do not match with the other information supplied in the form.
It is also estimated that 250,000 cheques are made out to pay for stamp duty each year. This can cause a number of issues including cheques exceeding the 30 day limit required for transactions, incorrect UTRN reference numbers or even cheques being sent to the wrong address.
This not only causes significant delays and difficulty for all parties involved in the conveyancing process, but also places a substantial strain on HMRC, which is required to send out roughly 40,000 payment demands each year. It is thought that bringing in such changes could also reduce administrative costs and resources on businesses in the longer term.
While HMRC admit that they will be required to make some exceptions to the ban on paper filing and payment over the coming years, there is a general consensus that using digital means to complete the conveyancing process is both quicker, more effective and more reliable. And HMRC has not ruled out the possibility of penalties to ensure compliance.
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