A salutary lesson on SDLT matters...

[Omnibuswoman]

When we purchased our plot in early 2020, I decided to do the conveyancing myself (as I'm basically a tight-arse). I didn't want to pay a solicitor to take months to do something I could easily do myself. Having completed that successfully, the purchase was finalised, and I then filled in the SDLT form and sent off a cheque for the tax that I believed was due. At that point, being aware that this was a second property, I calculated that we owed SDLT at the higher rate, so £5,000 on a plot purchased for £150,000.

 

Skip forward to September 2022, perusing on Buildhub I discover that a building plot is not necessarily a residential property for the purposes of tax. News to me! I went back to HMRC's website, and learned that if the plot was non-residential, then the tax I owed would have been £0 (as the threshold starts at £150,001). As the plot we bought had previously been an agricultural field, prior to the vendor having obtained planning consent, then it was indeed non-residential for tax purposes.

 

I contacted HMRC's helpline to discuss, and the chap I spoke to kindly explained that I could write in and ask them to repay me. I'm not sure whether he was aware or not, but at that point there was actually 0% chance of HMRC repaying us. The rules said that I had only 12 months from the date of completion (June 2020) to revise my SLDT submission. After that, tough luck. Any incorrectly paid tax would not be repaid.

 

HMRC replied to my first letter, rejecting my request on the grounds that I had not quoted the piece of law I was relying on to ask for it. 

 

I then spent an entire weekend researching caselaw on situations such as mine. What an exercise in disappointment that was, to put it mildly. I read every single published judgement on SDLT cases for the previous 5 years, as well as the relevant regulations themselves, and concluded that there was simply no basis for me to persuade HMRC to repay us. I was crestfallen, and had to admit to HWMBO that I had gifted £5k to the Treasury out of my own ignorance, and my unwillingness to pay legal fees. 

 

Still, I decided that it was worth one final try, and I sat down in January to write the mother of all letters to try to persuade HMRC to repay us. I explained my mistake, cited the regulations, and asked if they could exercise discretion to allow a late amendment to the SDLT1 form on the grounds that they had themselves checked the form at the time and had not identified my error, despite there having been enough information on the form for them to have reasonably suspected that the property was not residential. I said that if they would not do that, would they please consider opening an enforcement case against us so that they could review whether we had paid the right amount of tax, and calculate for themselves what we owed (which was the only legal route that would allow them to revise the SLDT1 form beyond the time limit). Then I went for the heartstrings, saying that we really couldn't afford to gift this money to the Treasury, and if they could please see their way to reimburse us, we would be eternally grateful.

 

A couple of weeks ago HWMBO found a credit in his bank account of £5089.00 with a reference of 'HMRC SDLT'. They had not only repaid us, but added interest for the time they had had the money. They haven't written to us to say why they decided to do this, so I've no idea which part of the letter was effective, but it feels churlish to question it. A very salutary lesson in there for me. And perhaps for some of you too.  

 

 

[joe90]

Well done you 👍 (have you considered doing this as a side line 🤷‍♂️).

Edited March 9, 2023 by joe90

[Omnibuswoman]

Thanks Joe90.
 

I have the advantage of having previously been an independent adjudicator on complaints that had been through HMRC’s own complaints process, checking the exercising of their discretion and their recognition of their own maladministration.

I’m sure this helped me in constructing the arguments!

 

[Jilly]

Phew that was lucky!

[joe90]

1 hour ago, Omnibuswoman said:

have the advantage of having previously been an independent adjudicator on complaints that had been through HMRC’s own complaints process, checking the exercising of their discretion and their recognition of their own maladministration.

Perhaps they remembered you 🤣

[ToughButterCup]

2 hours ago, Omnibuswoman said:

...They haven't written to us to say why they decided to do this, so I've no idea which part of the letter was effective, but it feels churlish to question it. A very salutary lesson in there for me. And perhaps for some of you too.  

 

A good argument could be made for HMRC being told to do that (say why) so that others and not least HMRC's own knowledge base can improve.

 

If a public organisation isn't (appropriately) Open and one that can be seen to publicliy learn from its mistakes, then mistrust flourishes. And we don't have far to look for current examples of that .

 

In fact, since 

1 hour ago, Omnibuswoman said:

...

 [you] have the advantage of having previously been an independent adjudicator on complaints that had been through HMRC’s own complaints process, checking the exercising of their discretion and their recognition of their own maladministration.

...

 

the lessons are all the more likely to remain hidden.  .

 

Could I suggest you - in your spare time - ask for an explanation please?  BH members benefit greatly from articulate members experience.

 

And we all lurvvvve a  moan about they nasty HMRC Cock-Wombles.

[Omnibuswoman]

Yes, I’ll contact them and ask if their response to my letter has been lost in the post. And if it hasn’t, will ask if their decision maker would kindly like to set out their reasons for accepting our request. 
 

When I get a reply, I will share it here.

[Roundtuit]

Well done!  I suspect that a lot of people have paid sdlt where none was due, due to ill-informed solicitors and conveyancers who are used to doing straight forward residential work.

[SteamyTea]

If you write a similar letter to your builder, you may get the electricity bill paid.

Then, start on everyone you have every purchased stuff from, with a bit of luck, you will reclaim enough to pay for you building.

 

 

Talkin' New York
Bob Dylan

 

After weeks and weeks of hanging around
I finally got a job in New York town
In a bigger place, bigger money too
Even joined the Union and paid my dues
Now, a very great man once said
That some people rob you with a fountain pen
It don't take too long to find out
Just what he was talking about
A lot of people don't have much food on their table
But they got a lot of forks and knives
And they gotta cut somethin'

[ToughButterCup]

39 minutes ago, SteamyTea said:

If you write a similar letter to your builder, you may get the electricity bill paid.

....

 

A different route would work here.... deduct the cost of the electricity from the final bill. 

 

 

I'm sure that @SteamyTea, @Omnibuswoman and other regulars know that, in the round, and  if the circumstances are appropriate, reclaiming unjustifiably incurred expenses from a builder is a reasonable thing to do.

 

I write this post principally for those who lurk here on BH, but then - too late - tell us a tale of woe which ends by telling us they paid their bill in full.

If builders make unreasonable charges, pay part of the bill  and then  agree a final settlement later.

[kandgmitchell]

Well we are new to this site but this one thread alone has proved it's worth. We purchased our plot last November and paid the £4500.00 sdlt that our solicitor said we had to. Having read @Omnibuswoman thread we spoke to HMRC to confirm and have sent off for a refund (Plot @ £150K so 0%). When I requested a copy of the SDLT form we filled in originally from the solicitor and told him why we wanted it, there was no acknowledgement of having given us the wrong advice whatsoever!

 

If we get the tax back (this is HMRC after all) there'll be a contribution to the site's running costs coming.....

[kandgmitchell]

Just a follow up to this with many thanks to @Omnibuswoman

Sent a letter to HMRC in April with all the details their phone line suggested. Got a letter from them last month asking for all the information I had already given them. This week we found they had repayed the whole amount plus nearly 70 quid interest.

For this alone, membership of this forum has been worth it let alone the other useful stuff I keep finding. Shame the refund just covered the archaeological survey so it's not spare as such but certainly very, very welcome.

[Temp]

@kandgmitchell Well done. If you make a donation send me a PM with your address and I'll send you a buildhub keyfob.