SDLT Penalty where no stamp duty was due!

[Masca]

Hi. I would be very grateful for any advice that anyone can give regarding my situation...

I purchased a property by auction earlier in the year from a 'known' vendor, and the purchase process was therefore VERY simple. I therefore did not use a solicitor/conveyancer. The purchase price was considerably below the stamp duty threshold and so no stamp duty was due. All good so far... What I sadly didn't realise is that I should still have filed an SDLT1. I have now done this and I have received the SDLT certificate. I have also received a £200 penalty notice, and herein lies my 'problem'. I am an honest person, and there is no way that I would not have paid stamp duty on time had any been due - this was simply an innocent mistake. I appreciate that rules are rules, but in the current climate you would assume that HMRC have better ways of using their time than filing and processing forms that are going to generate no income! Anyway, that aside, I feel that I have to at least try to appeal the penalty charge, as it amounts to me paying £200 as a fine for not paying something that wasn't due! In other areas of SDLT law. I believe that penalties can be no more than 100% of the tax due - how come the situation varies so greatly in this instance? Also, had the purchase price been below £40,000 (a not insignificant sum currently), then not only would no stamp duty have been due, but I would NOT have had to file an SDLT1! I know I should have researched more thoroughly when I did my conveyancing, and accept that I am entirely at fault for not filing the form; it is the level of the penalty that I feel is unfair given the circumstances. I have never filed anything late with HMRC before.

Can anyone please offer any advice regarding my chances of successfully appealing and/or the approach I should take, or perhaps point me to any similar cases that have already been heard at a tribunal? Thank you - any help will be much appreciated.

[section 44]

Irrespective of whether or not any SDLT is payable, if the transaction is notifiable then an SDLT return needs to be filed. A failure to do so, or a delay, may result in a penalty.

I feel that I have to at least try to appeal the penalty charge

To be successful, you would need to have a reasonable excuse. Your excuse appears to be ignorance of the law, this is not a reasonable excuse.

I believe that penalties can be no more than 100% of the tax due

Your belief is wrong.

I feel is unfair given the circumstances

If you feel the law is unfair then I suggest that you lobby parliament to change the law. However, it is unlikely that any such change would be retrospective. Consider contacting your MP to raise the issue in parliament, start a petition or perhaps a peaceful protest.

[section 44]

The 2010 first-tier tax tribunal decision of Christopher Ryan v HMRC (TC00596) might be worth reading. Broadly, it concerned a taxpayer who didn't submit an SDLT return in respect of a lease that was granted to him. His appeal was dismissed, his excuse wasn't reasonable.

From the decision:

"The Appellant appealed against the penalty on the grounds that he was not aware of the obligation to make a land transaction return and nobody had notified him of that obligation – “I feel more should be done to alert people to the fact that there are penalties for not registering leases on time and at the moment I feel it is kept very quiet and another way of making money.” He also said that his business had closed after just 7 months and he had lost a lot of money. In his reply to HMRC’s Statement of Case, he said “I feel badly let down by people that should of told me of any penalties for not registering the lease on time including HMRC and Solicitors involved in the lease transfer.” "