Home buyers are receiving a stark warning from HM Revenue and Customs (HMRC) to steer clear of false stamp duty claims. The tax authority revealed it is actively hunting down agents who submit fraudulent stamp duty land tax repayment claims.
Certain agents have been approaching homeowners, promising they can recover previously paid stamp duty for a fee by falsely declaring the property as non-residential due to being uninhabitable, HMRC revealed. The revenue body cautioned that such claims frequently result in homeowners being hit with the full stamp duty bill, alongside penalties and interest charges.
HMRC emphasised its established position that properties requiring repairs but maintaining the core features of a dwelling remain suitable for residential use and therefore subject to residential stamp duty rates.
A crucial element in assessing suitability is whether the property had previously served as a residence, the authority noted.
HMRC confirmed it is deploying both civil and criminal enforcement powers against those attempting to undermine the taxation system.
Anthony Burke, HMRC’s deputy director of compliance assets, stated: “Home buyers should be cautious of allowing someone to make a stamp duty land tax repayment claim on their behalf. If the claim is inaccurate, you could end up paying more than the amount you were trying to recover.”
Why do we pay stamp duty?
Stamp duty was originally introduced as a temporary tax in 1694, to raise money for a war against France. However, the government realised that it is such a good method of raising revenue, that it was kept in place.
Until 1997, the highest amount of stamp duty payable was just 1 per cent of a property’s value, but now the rates have increased, with properties at the most expensive end of the scale (over £1.5 million) paying a 12 per cent stamp duty charge, according to WBW Solicitors.
Stamp duty is applicable across England and Northern Ireland. Those uncertain about the regulations should consult the stamp duty guidance available on gov.uk, HMRC advised.
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