Stamp Duty errors add to mounting pressure in cost-of-living crisis


It’s no secret that the UK is currently in the midst of a cost-of-living crisis. Inflation is currently hovering around 10% and projected by many experts to go as high as 13% by the end of the year.

The lack of gas storage has left the U.K. particularly exposed to rises in energy prices. Real-term incomes have somewhat stagnated since the previous financial crisis of 2008. And all this comes on the tail of a Global Pandemic which shut down economies, disrupted supply chains, and ravaged businesses for nearly two years.

A Perfect Storm

All of this has combined to create a perfect storm of circumstances that have led to the current crisis. While we can’t offer a solution that would make all of this go away (even we aren’t that good), we can maybe help the average law firm and their clients have a little more financial wriggle room to play with in these difficult times.

How Overpayment Impacts Homeowners

First of all, from the point of view of the property owner, it should be obvious why the overpayment of property tax on their purchase would only exacerbate their struggles in the current economic climate.

If you want proof of what a significant factor Stamp Duty Land Tax is in the purchase of the average home, look no further than the period between 8 July 2020 and 30 September 2021. In that fourteen-month “holiday” period, the U.K. property market surged with activity, and when it came to an end, that increase also dropped.  

Householders are looking for the savviest deal at any time, and no more so than now. How much less might the average family struggle to pay their increasingly peaking energy and food bills if they found their Stamp Duty bill to be thousands, or even tens of thousands of pounds lower?

Whether it’s missed Multiple Dwellings Relief claims, misclassification of property, or a simple misunderstanding of the various surcharges which now exist in the U.K. SDLT legislation, errors in Stamp Duty could very well be making the difference between a household keeping its head above water or not in this current crisis.

How Overpayment can impact Law Firms

And then there’s law firms. PII premiums are higher, to add to your higher power bills, rents, and so on. This means that your firm can ill-afford to be making the sort of errors that make that amount of difference to your clients. All it takes is one client to be contacted by a Claims Farm offering to look at their SDLT bill on a recent purchase, and suddenly you can be dealing with an avalanche of questions, none of which are likely to have comforting answers:  

How many more clients might want their files revisited?  

What sort of settlement might your firm have to reach with anyone found to have overpaid?  

How will this impact your reputation in an already highly competitive market?  

And on the bottom line, what might all of this do to your already eye-wateringly high PII premiums?

Providing you with some relief

At Compass, we spend an awful lot of time thinking about the various reliefs which apply to Stamp Duty, but ultimately the biggest relief we work on is yours.

By using our unique custom-built system, you can save yourself the hassle of asking all those difficult questions, and save your clients any further financial pain than is necessary in an increasingly bleak climate.

When there’s so much at risk for you and your clients, why wouldn’t you take one simple step to make all your lives so much easier?

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