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5 things you should know about HMRC’s Stamp Duty Calculator…

Posted 30th September 2022 by sdlt-admin

Have you purchased UK property that you paid Stamp Duty Land Tax on? See if you are eligible for a refund from HMRC on overpaid SDLT. We’ve reclaimed over £15 million in the last 12 months on overpaid Stamp Duty.

When you’re looking to work out what the Stamp Duty is for your purchase, HMRC have provided a helpful calculator which works out the answer for you based on a handful of straightforward questions. But just how good is the calculator?

1. Comprehensive SDLT Calculator? Not really

HMRC’s calculator is based on the most straightforward, vanilla circumstances possible in terms of the property and the buyer. At present, 49 different exemptions, exceptions and reliefs apply to Stamp Duty in England and Northern Ireland, and the calculator does not take account of information that would be relevant to most of these.

 

Read: How do I get a Stamp Duty Refund from HMRC?

 

2. Accurate SDLT Calculator? Well…

HMRC’s calculator was designed as a guide rather than an actual tool – you’d be forgiven for not realising this, given that it’s actually called a calculator. However, don’t take our word for it – per HMRC themselves to the Times Newspaper in 2019, the Calculator is intended as a guide, and solicitors should not solely rely on it to calculate Stamp Duty liability on purchases.

3. Easy to use SDLT Calculator? Erm…

Although the calculator is often used by solicitors when working out Stamp Duty on a purchase, it is of course publicly available and therefore open to use by members of the public. So it must be very clear and straightforward, right? Well, let’s consider that the first page of questions includes one about whether the property is leasehold or freehold. Simple enough, right? Except look closer and you’ll see a note explaining that if you are buying an existing lease then you should tick ‘Freehold’ and only tick leasehold if it’s a new lease. Clear as mud for the average property buyer without a property tax background…

4. Official Stamp Duty Calculator means up to date? You’d think…

Kwasi Kwarteng’s mini budget on the 23rd of September 2022 caused all sorts of ructions in financial markets. But significant alterations to Stamp Duty which meant everyone should pay less is a good thing, right? Only, in keeping with the chaos elsewhere, as of the 29th September 2022, six days after those changes were announced ‘with immediate effect’ the HMRC calculator had still not been updated to reflect them, with a banner explaining this and saying solicitors must instead ‘refer to the latest guidance for calculating your Stamp Duty Land Tax.’

 

Read: How much Stamp Duty do I pay on a buy-to-let?

 

5. Is the Stamp Duty calculator the safest option? Nope…

Ever-increasing refund claims to HMRC for overpaid Stamp Duty, more errors coming to light in relation to the 3% second property surcharge and more and more law firms unable to meet their rising PII costs would suggest that the calculator, as the most used tool for working out Stamp Duty, isn’t all that safe. In fact, other options do exist, and they are not only more accurate but also more efficient and in one case were updated within hours of the Chancellor’s announcement.

In conclusion

There’s an old saying that if you want something done, you can either do it quickly or well. HMRC’s Stamp Duty calculator is the exception that disproves this rule, being a poor implementation without the grace of a rapid update. When it comes to your home, the calculator is a gamble not worth making.

Have you purchased UK property that you paid Stamp Duty Land Tax on? See if you are eligible for a refund from HMRC on overpaid SDLT. We’ve reclaimed over £15 million in the last 12 months on overpaid Stamp Duty.

 

 

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SDLT Refunds is a division of Cornerstone Tax.
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