HMRC Stamp Duty Investigations Surge Past 3,000 Cases in England
HM Revenue and Customs (HMRC) is currently investigating more than 3,000 house buyers in England over stamp duty land tax (SDLT) claims, with thousands of additional individuals receiving warnings. This marks a significant increase in enforcement activity, as the number of probes has soared beyond 3,000 under the current Labour Party government.
Sharp Rise in Enforcement Actions
The tax authority's crackdown represents a dramatic escalation compared to the previous year. In that period, HMRC investigated 1,617 buyers and successfully recovered £85.4 million in unpaid taxes. The current investigations involve an average tax liability of £66,000 per case, highlighting the substantial financial stakes involved.
Targeting Speculative Refund Claims
This intensified scrutiny comes amid HMRC's focused effort to combat what it describes as "speculative" refund claims. These claims typically argue that properties should have been classified as non-residential for SDLT purposes due to being uninhabitable at the time of purchase, often citing needs for substantial renovations.
Mike Warburton, a respected tax expert, explained the common basis for these claims: "Refund requests are normally submitted on the grounds that the property was not habitable because it required significant renovations and therefore should not have been charged the residential stamp duty rate. While there are legitimate circumstances where reduced rates can apply, some agents have been aggressively promoting speculative claims on a no-win-no-fee basis for relatively minor issues like needing a new kitchen or rewiring."
Heightened Public and Regulatory Attention
Graham Caddock of City accountancy firm Lubbock Fine suggested that public attention surrounding former Labour Party deputy prime minister Angela Rayner's underpayment of stamp duty could further increase investigation numbers. "HMRC is likely to step up its scrutiny on second property acquisitions following such high-profile cases," Caddock noted.
Official Warnings About Rogue Agents
An HMRC spokesman issued a clear warning to homeowners: "Homebuyers should be on the lookout for rogue repayment agents offering to make stamp duty repayment claims for them. If a claim is inaccurate, people could end up paying more than the amount they were trying to recover."
The revenue body confirmed it is actively pursuing agents who submit false SDLT repayment claims. Some agents have reportedly suggested, for a fee, that they can reclaim stamp duty already paid by arguing properties were non-residential due to being uninhabitable.
Expert Advice for Property Buyers
Anthony Burke, HMRC's deputy director of compliance assets, offered specific guidance: "Home buyers should exercise caution when considering allowing someone to make a stamp duty land tax repayment claim on their behalf. If the claim proves inaccurate, you could ultimately pay more than the amount you were attempting to recover through the process."
This comprehensive enforcement initiative underscores HMRC's determination to ensure proper SDLT compliance across England's property market, particularly targeting what it views as abusive or speculative refund claims that undermine the tax system's integrity.
