What is Changing?
Currently, the deadline to submit a SDLT return and pay any SDLT due is 30 days from the effective date of transaction, which is either the date of completion or the date that occupation was taken.
The Government has reduced this period to 14 days for transactions with an effective date on or after 1 March 2019.
The relevant legislation will be introduced in the Finance Bill 2018-2019.
What is the Impact and why does it matter?
Currently, if you do not file your SDLT return by the deadline, you have to pay an automatic fixed penalty of £100 or £200, depending on how long after the deadline you file the return.
Under the new rules, if you do not pay your SDLT within the 14 day period, you will have to pay interest from the day after the deadline until the date you actually pay.
14 days (which includes non-working days) significantly shortens the time available, especially over bank holiday periods. For example, a transaction which completes on Friday 12th April 2019 only allows 7 working days to file and pay the SDLT.
This measure will impact principally on law firms and conveyancers who submit SDLT returns and payments on behalf of their clients. For more complex commercial transactions where detailed enquires may be needed to establish the information required for the return, the new 14 day time limit could be onerous.
What about Applications to Defer Payment?
Purchasers can apply to defer the payment of SDLT, in cases where the sum payable for a property is contingent or uncertain.
The application will need to be made, and HMRC’s approval of the application obtained, within 14 days of the effective date under the new legislation. The current deadline is 30 days.
Considering HMRC’s current internal processing target is 28 days for approving such applications, it is likely that purchasers are not going to obtain confirmation before the 14 day time limit.
There are currently no plans to extend the 14 day limit for the application to defer (or indeed to keep the existing 30 day deadline) but the government has made some statements about improving turnaround times.
Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.
For further information, please contact Paul Jagger