31 January 2019

Don’t miss the new shorter SDLT filing deadline which takes effect on 1 March 2019

The time limit to file a Stamp Duty Land Tax (SDLT) return and pay the tax due to HMRC is being halved from 30 days to just 14 days.

SDLT is the tax payable by purchasers and tenants when they acquire an interest in land in England and Northern Ireland with a value over a certain threshold.

The current deadline for submitting a SDLT return and paying any tax due is 30 days from the effective date of the transaction. This time limit is being slashed to just 14 days for transactions with an effective date on or after 1 March 2019.

When is the effective date?

The effective date of a transaction is usually the date that the transfer or lease of a property is completed, but it can also be the date that a contract is “substantially performed” if this occurs before completion. This happens when a buyer or tenant takes possession of a property, makes the first payment of rent or pays most of the purchase price before completion.

What happens if you miss the deadline?

Fixed penalties

As from 1 March 2019, if you do not file your return within the 14 day time limit, you receive an automatic fixed penalty of £100.

If your return is more than three months late, this increases to an automatic fixed penalty of £200.

Interest will also be charged if you pay the tax late.

Tax based penalties

If your SDLT return is more than a year late, you may be liable to pay a tax-based penalty which can be up to the full amount of the SDLT due for the transaction.

Don’t get caught out

As the SDLT pay and file window is being significantly reduced, it is certainly worth bearing in mind especially over bank holiday periods. Lawyers and businesses alike must ensure that internal processes are in place to have SDLT returns drafted, approved and filed, and monies paid over to HMRC, in good time to avoid being penalised. As from 1 March 2019, a fast two-week turnaround will be required so don’t leave considering SDLT until the end of a transaction.

Remember, the 14-day filing period includes non-working days, and if the filing deadline falls on a weekend or bank holiday, you must ensure payment reaches HMRC on the last working day before the deadline to avoid a penalty.

Holly is a paralegal in our Commercial Real Estate team.

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