It is important to pay the correct amount of SDLT at the right time to avoid any penalties. Getting it wrong or deliberately underpaying SDLT can lead to hefty penalties.
When could a penalty be charged?
There are two main types of penalties for SDLT:
- Penalties for late filing and late payment of SDLT.
- Penalties for inaccurate returns (or amendments) leading to an underpayment of SDLT.
What are the late filing and/or payment penalties?
The SDLT return and payment is due within 14 days of the effective date which will usually be your purchase date and there are penalties if you, or your conveyancer, do not meet this deadline.
| Late Action | Penalty |
| Filed and/or paid after 14 days but within three months of the filing date | £100 |
| Filed and/or paid more than three months after the filing date | £200 |
| Fails to be filed and/or paid within 12 months of the filing date | Tax-based penalty of up to 100% of the tax due |
| HMRC issues a formal notice and there is non-compliance within the specified period | Daily penalty of up to £60 per day, subject to a tribunal order |
Interest will also accrue on any unpaid SDLT from the due date until the date of payment. See our blog “That’s Interesting…” for more information on interest charges.
How much are the penalties for inaccurate returns?
If your SDLT return or any amendment to your return contains an inaccuracy which is considered to be careless or deliberate and which leads to a loss of tax HMRC will charge a penalty. The amount of penalty will depend upon the type of inaccuracy.
| Type of inaccuracy | Percentage of Potential Lost SDLT |
| Careless | 30% |
| Deliberate but not concealed | 70% |
| Deliberate and concealed | 100% |
Where a document contains more than one inaccuracy, a penalty is payable for each inaccuracy and as with the late filing and payment penalties, interest will also be charged on any unpaid SDLT as a result of an inaccuracy.
What is a careless error?
An inaccuracy is considered ‘careless’ if it results from a failure to take reasonable care. Even if an inaccuracy is neither careless nor deliberate at the time it is made, it will still be treated as careless if the person later discovers the error and fails to take reasonable steps to notify HMRC.
What is a deliberate error?
An inaccuracy is considered ‘deliberate but not concealed’ if it is intentional, but no effort is made to hide it.
What is a deliberate and concealed error?
An inaccuracy is ‘deliberate and concealed’ if it’s intentional and steps are taken to cover it up, like providing false evidence.
Can I appeal a penalty?
Yes, you can appeal a penalty provided you notify HMRC within 30 days of the decision.
To successfully appeal a late filing penalty you would need to show that you had a reasonable excuse, this would mean proving that an unexpected event outside of your control stopped you or someone else from filing the return. Some typical examples include:
- You or your advisor suffered from a serious or life-threatening illness which resulted in an unexpected hospital stay
- Death of your advisor
- The software you use to complete your returns failed just before the deadline
- HMRC experienced technical problems so you couldn’t file your return
- Fire, flood, or theft
- Your return or payment was lost or delayed in the post
You would need to provide evidence to support your reasonable excuse and you must also show that you did everything possible to file the return as soon as you could after the event.
To appeal against a penalty for an inaccuracy you would need to submit your appeal to HMRC within 30 days of the penalty notice together with proof that there was no careless or deliberate error.
A good defence against a penalty is that you were advised by a specialist and that you had taken all reasonable steps to ensure that the return or amendment was accurate based on your personal circumstances.
How to guard against a penalty
The best way to ensure you can avoid a penalty is to ensure that you seek specialist advice before filing a return or amendment. Relatus can advise on all aspects of SDLT and a written advice from Relatus, or a full disclosure amendment prepared by us, will protect against penalties.
