Late filing penalties are only waived if there is a ‘reasonable excuse’ for the late submission. But, HMRC take the view that far too many returns are being submitted late, and also that practitioners are submitting too many appeals. Their guidance makes it clear that a ‘reasonable excuse’ will only be considered on the basis that the buyer was presumably able to instruct an agent to do what was necessary to complete the land transaction while the sale was ongoing, and accordingly the buyer would also be able to instruct an agent to do what was necessary to submit the SDLT transaction. Thus, it would have to be some ‘exceptional event’ that did not prevent completion of the planned transaction, but did prevent submission of the SDLT return. Most importantly, a failure by the buyer’s agent/solicitor to do something (eg send off the return) does not give the buyer a ‘reasonable excuse’. If the buyer leaves the submission of the SDLT return to the agent/solicitor, who then fails to deliver it on time, HMRC will still regard the buyer as responsible.

Examples of what can be an ‘exceptional event’ justifying a ‘reasonable excuse’ would include a return that is lost or delayed in the post; a serious acute illness (eg heart attack, stroke or other life threatening condition) that prevents the buyer’s adviser from acting, or alternatively the death of the adviser. The bottom line of this is that HMRC are taking a tough line. If you do not submit in time – or if you get the form wrong – then you can expect to have to pay a £100 penalty.

See SDLT Practitioners News, issue 12. © Practical Lawyer