Latest news with #ComplianceAssets
The Sun
31-07-2025
- Business
- The Sun
Warning over new Stamp Duty refund scam that could cost you £1,000s – signs to look out for
BUDDING buyers have been warned over Stamp Duty refund scams that could see you lose thousands of pounds. HMRC has warned that bogus tax agents are preying on buyers, promising to win them back stamp duty payments they've made. 1 Tax agents are claiming that they can win back refunds on your behalf if you have bought a property which needs repair work. But the taxman has warned that these claims are not valid, and you could be on the hook for the full stamp duty bill, plus penalties and interest - which could cost you thousands of pounds. Anthony Burke, HMRC's deputy director of Compliance Assets, said: "Homebuyers 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." Stamp Duty is a lump sum you have to pay to the taxman when you buy a property worth over a certain price. What you pay depends on the type of property you're purchasing, how much it's worth, and what type of buyer you are. You don't pay anything for properties under £300,000 if you're a first-time buyer, but for existing homeowners the threshold is lower at £125,000. So if you were a first-time buyer buying a £350,000 property, you would pay £2,500, but if you were buying your next home, you would pay £7,500. However, fall prey to a bogus repayment agent and you could end up forking out thousands of pounds more than you should have. As an example, someone buying a second home in London for £1,100,000 would pay £53,750 stamp duty. The Sun's James Flanders explains how to find the best deal on your mortgage If that home needed modernisation and repair, such as a a new boiler and rewiring, this could stop that person moving in straight away. The homeowner could be targeted by a repayment agent falsely claiming they can reclaim overpaid stamp duty because the home is classed as non-residential and not residential. They may then decide to go ahead and pay the agent to make a claim on their behalf and receive a payment. But, later in the year, HMRC would open a compliance check into the repayment claim and conclude that the property was residential. This would lead to the homeowner finding out they owed stamp duty to the tax man plus interest and a penalty. If the amount the person got back from the stamp duty refund was £9,250 and the agent charged a 30% fee, the refund would be £6,475. However, the refund owed to HMRC would be worth £9,250, plus any added penalties and fees, costing them thousands of pounds. The decision to class homes that need repairs as residential comes after a landmark Court of Appeal decision. The decision backed up HMRC's view that if a property needs repairs but is still suitable for use as a dwelling, residential SDLT needs to be paid on it. In other news, we revealed how some people can end up paying stamp duty twice through a virtually unknown loophole. What is stamp duty? STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay. You pay the tax when you: Buy a freehold property Buy a new or existing leasehold Buy a property through a shared ownership scheme Land is transferred to you or property in exchange for payment, for example, you take on a mortgage or buy a share in a house The rate you pay depends on the price and type of property and certain thresholds. If you are a first-time buyer no stamp duty is due if the property is worth £300,000 or less. You'll also get a discount if the purchase price is £500,000 or less and will only pay 5% SDLT on the portion from £300,001 to £500,000. Those who aren't first-time buyers will pay different rates depending on the value of their new home: If it's up to £125,000 - no stamp duty is paid For the next £125,000 (the portion from £125,001 to £250,000) - stamp duty is charged at 2% For the next £675,000 (the portion from £250,001 to £925,000) - stamp duty is charged at 5% For the next £575,000 (the portion from £925,001 to £1.5 million_ - stamp duty is charged at 10% For the remaining amount (the portion above £1.5million) - stamp duty is charged at 12% You'll usually have to pay 5% on top of SDLT rates if buying a new residential property means you'll own more than one.
The Independent
31-07-2025
- Business
- The Independent
HMRC warns home buyers about bogus stamp duty repayment claims
Home buyers are being warned by HM Revenue and Customs (HMRC) to avoid false claims about stamp duty. The revenue body said it is actively pursuing agents who make false stamp duty land tax repayment claims. Some agents have suggested that, for a fee, they can reclaim stamp duty the buyer has already paid by saying the property is non-residential because it is uninhabitable, HMRC said. It warned making claims of this kind often leave the homeowner liable for the full amount of stamp duty, plus penalties and interest. HMRC said its long-standing view is that if a property requires repairs but retains the fundamental characteristics of a home, it is still suitable for use as a home and attracts residential rates of stamp duty. A key factor in determining suitability is whether a property was previously used as a home, it added. HMRC said it is using civil and criminal powers to deal with those who undermine the tax system. Anthony Burke, HMRC's deputy director of compliance assets, said: '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.' Stamp duty applies in England and Northern Ireland. Anyone who is unsure of the rules should check the stamp duty guidance on HMRC said.
