Penalties for late Land Transaction return (SD7) guide

SD7 Penalties for late land

transaction returns

This leaflet tells you about penalties that you may get if you

do not complete and send us your land transaction return on time.

It also explains how to appeal against those penalties.

SD7 HMRC 05/19

Contents

Introduction 3

When should a land transaction

return be delivered? 3

What happens if my land transaction

return is late? 3

When penalties occur 3

Fixed penalties 3

Tax-based penalties 3

How will I know if I’ve been

charged a penalty? 4

What if I receive a penalty notice? 4

Checking your notice for a

tax-based penalty 4

What if the taxpayer has died? 4

Appeals to HMRC 4

Reviews 5

How do I get a review? 5

Late appeals 6

Unusual circumstances 6

Do I need to pay the penalty

if I ask for a review? 6

If we agree you have

unusual circumstances? 6

If we do not agree you have

unusual circumstances 7

Tribunal appeals 7

How do I appeal? 7

Further details 8

Do I need to pay the penalty

if I ask for a tribunal hearing? 8

Reasons for not meeting

the deadline 8

What is a reasonable excuse? 8

What is not a reasonable excuse? 9

Help and advice 11

2

Introduction

If we do not receive your land transaction return and any

Stamp Duty Land Tax (SDLT) you owe on time, you’ll be liable

to a penalty. This leaflet tells you what those penalties are,

how to avoid being charged, how to appeal against a penalty

determination and how you can get help with your

land transaction return.

When should a land

A land transaction return should be delivered so that we

transaction return

be delivered?

receive it by the ‘filing date’. This is 14 days after the effective

date of the transaction. The ef fective date is normally the

completion date of the transaction, whether or not a document

shows this.

However, if a contract is substantially performed before

completion, the date that ‘substantial performance’ takes place

is the effective date. Broadly, substantial performance is when:

• payment of a substantial amount of the consideration

(generally 90% of the total amount) is made

• the purchaser is entitled to possession of the property

• the first payment of rent is made

• option or right of pre-emption is acquired

What happens if

my land transaction

return is late?

If you miss the filing date, you’ll automatically be charged

a penalty.

When penalties occur

Fixed penalties

If we do not receive the land transaction return within 14 days

of the ef fective date, you’ll automatically be charged a £100

penalty. If your return is more than 3 months late you’ll be

charged a penalty of £200. If you pay the tax late, you’ll also be

charged interest.

Tax-based penalties

If your land transaction return is more than a year late, you may

be liable to a tax-based penalty, which can be up to the amount

of SDLT due on the land transaction return.

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How will I know if

I’ve been charged

a penalty?

What if I receive a

penalty notice?

Checking your

notice for a tax-

based penalty

What if the taxpayer

has died?

If you’re charged a penalty, we’ll send you a formal penalty notice

telling you so. The penalty is due for payment 30 days after the

date of the notice. We may charge interest on any penalties

paid late.

If you have not already done so, you should send in your land

transaction return as soon as you can, and pay the penalty on

time. This will avoid further possible penalties, and avoid any

interest charge.

Check that you agree the calculation shown on the notice.

Where a tax-based penalty is imposed, we’ll normally have been

writing to you (or your tax adviser, if you have one) about

it and will have shown you how we’ve calculated it.

If you’re acting on behalf of a taxpayer who has died since

submitting a land transaction return in respect of which we

have charged a penalty, please tell us the date of death and

give your details.

Appeals to HMRC

If you disagree with a formal penalty notice you’ve been sent you

should write to us to appeal within 30 days of the date of the

formal penalty notice setting out why you disagree and enclose

any supporting documents or information. We’ll then look at our

original decision again and tell you the outcome of your appeal.

In most cases your appeal will be settled by reaching an

agreement with us. If this cannot be done you can either ask us

to review the decision or appeal directly to the tax tribunal.

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Reviews

How do I get

a review?

If you’re unhappy with the result of an appeal you can ask us to

look again at whether we were correct to issue you a penalty.

You need to do this within 30 days of the outcome of the appeal .

Your penalty will be reviewed by an independent HMRC officer

who’s not been involved in making the initial penalty decision.

Alternatively you can appeal directly to a tribunal within 30 days

of the outcome of the appeal. However if you decide to do so,

we’ll not be able to review the penalty for you, or if a review

has started, you need to wait for the outcome before appealing

to a tribunal .

You should write to the review team in Birmingham (see form

SDLT46) asking for a review. You should also use this form to

explain why you believe the penalty should be cancelled.

The review team will have 45 days from the date of your request

to complete their review. The 45 day review period can be

extended by agreement between both parties. You should

contact the review team if you wish to ask about an extension.

At the end of the review we’ll write to you to tell you

the outcome of the review. We could decide either to:

• uphold the penalty

• cancel the penalty

• amend the penalty

If the penalty is upheld but you’re still unhappy with the decision

you’ll still be entitled to pursue the matter to tribunal.

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Unusual

circumstances

Do I need to pay

the penalty if I ask

for a review?

If we agree you

have unusual

circumstances

Late appeals

The time limit for you to appeal against a decision is 30 days

from the date the decision was sent to you.

The law says that when you appeal to HMRC you have to do so

within the time limit. We may accept a late appeal if you had a

reasonable excuse for not appealing within the time limit and

you appealed as soon as you could after the excuse ended.

The law does not say what a reasonable excuse is. However, our

view is that you have a reasonable excuse only where some

unusual event which is either unforeseeable or beyond your

control has prevented you from sending in an appeal within the

time limit. Each case is considered on its own facts.

If you seek a review because you think you have unusual

circumstances for not sending your return by the deadline, you’ll

need to give us full details of your circumstances, including dates,

of when events happened. When the situation causing the

unusual circumstances ends we expect the land transaction to be

returned to us immediately, but normally we’ll make reasonable

adjustments on a case by case basis.

To avoid any interest which may be charged on the late

payment of a penalty you should pay the penalty even if

you’ve asked for a review. If you pay it and the review

removes the penalty, we’ll repay the penalty with interest.

If your review succeeds and you’ve not paid the penalty, no

interest charge arises. But, if the review does not succeed and

you’ve not paid the penalty, you may be charged interest from

30 days after the date of the formal penalty notice until the

day you pay it.

If we agree that your circumstances are an unusual event which

is either unforeseeable or beyond your control, we’ll write to tell

you and cancel the penalty.

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If we do not agree

you have unusual

circumstances

How do I appeal?

If we do not agree that your circumstances are an unusual event ,

which is either unforeseeable or beyond your control, we’ll

explain why and ask if you accept this. If you still think you

have a good reason, you may wish to ask the tribunal service

if they’ll consider your case at an appeal hearing. They’ll listen

to the arguments of both sides and decide if you have

unusual circumstances.

Tribunal appeals

There are 2 tiers of tribunals which deal with tax issues,

a first and upper tier. Nearly all tax appeals will be heard by

the first-tier tribunal. Only a small number of ver y complex

cases are likely to be heard by the upper tribunal but it will be

for the tribunal president to select such cases.

Tax tribunals are appointed by the Lord Chancellor, rather like

local magistrates, to deal with cases arising in a particular area,

or Division. They normally consist of 3 members with expertise in

taxation and they are assisted by a clerk who is often a solicitor

or accountant.

Tribunals usually hold their proceedings in public, but they can

suggest that all or part of a hearing should be in private if

justice so requires. Likewise, if you want your hearing to be in

private, you should ask the clerk to the tribunal who will hear

your appeal.

You can appeal against a penalty, however normally a tribunal

would wish to see proof of ‘unusual circumstances’ for not

sending your return on time before it would accept your appeal

against a penalty. You should read the guidelines on what we

agree are unusual circumstances before you make an appeal .

If a review has been requested, an appeal to the tribunal cannot

be made until that review has ended. Internal review, however,

will give an opportunity for customers to better understand

HMRC's case or indeed for either party to reflect and not pursue

the case.

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Further details

Do I need to pay the

penalty if I ask for a

tribunal hearing?

What is a

reasonable excuse?

In the past you had to notify us of your intention to apply to a

tribunal . You now need to apply directly to the Ministr y of Justice

to see if they’ll list your case for hearing by a tribunal. They’ll

tell you where the hearing will be held and other details you

need to know.

If you need more details about tribunals, go to

www.gov.uk/government/organisations/hm-courts-and-tribunals-

service/about

To avoid any interest which may be charged on the late payment

of a penalty you should pay the penalty even if you’ve asked for a

tribunal hearing. If you pay it and the tribunal hearing cancels the

penalty, we’ll repay the penalty with interest.

If your review succeeds and you’ve not paid the penalty, no

interest charge arises. But, if the review does not succeed and

you’ve not paid the penalty, you may be charged interest from

30 days after the date of the formal penalty notice until the day

you pay it.

Reasons for not meeting

the deadline

We consider each case and each excuse on its own merits. In our

view, you only have a reasonable excuse where some unusual

event, beyond your control, has prevented you sending back

your completed land transaction return to us, or making other

arrangements to do this by the deadline.

If you disagree with our view of what is a reasonable excuse

then you can ask for a review or appeal direct to the tribunal.

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What is not a

reasonable excuse?

You should allow sufficient time for your land transaction return

to reach us by the due date. However, where it was posted in

good time, and you can provide evidence of posting, we would

agree this as a reasonable excuse or an unforeseen event , which

disrupted the normal postal service and led to the loss or delay of

your land transaction return.

For example:

• fire or flood at the Post Office where the land transaction

return was handled

• prolonged industrial action within the Post Office or other

document carrier, which occurred after the land transaction

return had been posted to us or delivered to the document

carrier for transmission to us

• serious illness of your adviser - we would agree that serious

acute illness, such as a heart attack, stroke, or other life

threatening condition that prevented your adviser from

controlling his or her business and private af fairs is a

reasonable excuse

• death of your adviser - we would agree that the death of the

adviser dealing with your land transaction return is a

reasonable excuse

It’s your responsibility to gather all the necessar y information

to make sure that your land transaction return is completed and

returned by the deadline.

We’re unlikely to agree you were prevented from sending in your

land transaction return if you were able to manage the rest of

your private or business affairs during the period which you claim

to be covered by the reasonable excuse.

For example:

Land transaction return is too dif ficult

We would not agree as a reasonable excuse your opinion that the

land transaction return is too difficult to complete. If you have

difficulties, you should ask for help as early as possible from the

Stamp Taxes Helpline on 0300 200 3510, or a tax adviser.

Pressure of work

We would not agree that pressure of work is a reasonable excuse.

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Adviser is waiting for payment

We would not agree as a reasonable excuse that the reason for

not submitting your land transaction return on time is because

your adviser is waiting for payment or the SDLT is being paid by

another firm of advisers.

Waiting for a valuation

We would not agree that waiting for a valuation is a reasonable

excuse for not sending your land transaction return on time.

You should submit one with a best estimate of the valuation.

Delay caused by vendor’s adviser

If the delay is due to the vendor’s adviser, and this means that

your adviser is unable to submit the land transaction return

within 14 days. We would not accept this as a reasonable excuse.

Return cannot be signed as you’re abroad

We expect you to submit the land transaction return within the

deadline. Although your adviser cannot sign the land transaction

return, your Power of Attorney can. They must indicate they’re

signing in that capacity within box 73, by writing ‘Power of

Attorney’ underneath their signature. ( The Deed of Attorney does

not need to be submitted with the land transaction return.)

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Help and advice

You’ll find your tax affairs easier to manage if you keep

them up to date. If you have any queries relating to any

aspect of Stamp Duty or Stamp Duty Land Tax, phone the

Stamp Taxes Helpline on 0300 200 3510.

For more information on Stamp Taxes, go to

www.gov.uk/topic/business-tax/stamp-taxes

Your rights and obligations

Your Charter explains what you can expect from us and

what we expect from you.

For more information, go to

www.gov.uk/government/publications/your-charter

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