Reliefs and Exemptions: A Simple Guide on Stamp Duty 

Reliefs and Exemptions: A Simple Guide on Stamp Duty 

As of December 1st 2003, the regime of Stamp Duty Land Tax was brought into force, replacing the previous Stamp Duty. In spite of the similar names, the operation and mechanics of the tax is actually substantially different.  

Unlike Stamp Duty, SDLT is a tax on the individual, not a duty on the transfer documents. It is, in the main, related to the purchase price of the property (but not always), it is a self-assessed tax, the liability for which falls squarely on the shoulders of the purchaser of the property and does not prevent registration of title even fi the tax is not paid – unlike its predecessor.  

When the tax is calculated correctly, this is no issue. When it isn’t, it can mean that a buyer suddenly has a liability to HMRC for underpaid tax and for which the penalties can be quite severe. 

Similarly an overpayment of tax of which they may not, initially, be aware, can have consequences for both them and the conveyancer as the time window to correct the Return is limited (generally 12 months) and after that the buyers only recourse is to claim against their conveyancer.

You may think at this juncture that the tool to make sure the correct number is arrived at has already been provided by HMRC – their online calculator, accessed through their website, is designed to give you the SDLT liability on any purchase, right?  

As it turns out, no. First off, the calculator is too simplistic to cover all the nuances of the tax . At the last count, there are 49 exemptions, exceptions and reliefs relating to Stamp Duty Land Tax, any (or multiples) of which may apply to a given purchase. Where some might seem obvious (Charities Relief, Multiple Dwellings Relief etc.) others are less so.

What to do, for example:

  • Where a property is not inhabitable at purchase, or when land is purchased with pre-existing planning permission?
  • What about if the property has land attached with a restrictive covenant?
  • What if no formal agreement exists but land belonging to the property is used by a local farmer for grazing his herds?

Any of these circumstances (or many more) could lead to material alterations in the SDLT bill under the law which would be missed by simply using HMRC’s calculator. 

Most of the most important questions, and their answers, need to be dealt with before you even click on “Calculate my tax” in the HMRC website

Read our latest blog: SDLT Risks and How to Solve Them

Indeed in 2019 when commenting to the Times newspaper, HMRC’s spokesperson confirmed that the calculator is intended merely as ‘a guide’ and that it is not considered by them to be a complete tool.

Instead, conveyancers are expected to make their own enquiries into the precise nature of transaction and property and satisfy themselves as to how both fit with the various twists and turns within the Stamp Duty legislation.

 If you get it wrong, you could be landing your client with a bill higher than what they need to pay, or worse, underpaying and leaving them the ticking timebomb of a future enquiry and a penalty payment plus interest.  

The liability for the SDLT may lie with the buyer, but who completed and filed the SDLT return on their behalf?   To whom will they look for recompense for their losses? Who will they blame for money spent out unnecessarily?

With PII premiums rising all the time (30% in the last quarter of 2021) and the SRA gearing up to increase the amount it can fine firms for poor conduct, it isn’t the time to be taking chances.

Larger firms may have a tax practitioner in house with enough knowledge of the SDLT system to give advice, but smaller firms and sole practitioner conveyancers will be out on a limb. 

So what are the basics to look out for:

  • Properties with additional land
  • properties which may have self-contained additional dwellings contained within them
  • land with planning permission
  • an uninhabitable property
  • a mixed-use property (with both commercial and residential elements, i.e. a shop with a flat above it) are all possible candidates for a more complex treatment.

But the truth is that there is no easily laid out shortcut for the sort of knowledge one would require in order to correctly identify the various elements which might apply to any given purchase. 

So you could refer your clients to a tax partner in your firm, or a separate tax adviser, or you could simply use Compass.  

Designed specifically to address Stamp Duty Land Tax as a whole, and developed in conjunction with tax experts and conveyancing solicitors, Compass will give the correct answer to any SDLT query quickly and efficiently.

It will also produce a CQS Compliant Audit trail for each case and will provide reference to a dedicated expert adviser where it identifies that a case is particularly complex. 

All you need to do is answer some factual questions about the purchaser, the property and, in some cases, the vendor and, voila, Compass delivers the answer – on our PII not yours!

Read this insightful article on The Stamp Duty Holiday causing Professional negligence claims – which could have been avoided by using Compass.

Best of all, Compass is designed to integrate directly into any case management system, meaning that it’s quick and easy to access, and with an intuitive interface, learning how to use it will be just as straightforward. 

There’s never been a more challenging time to be in conveyancing – why would you head out without the very best tools to navigate the process? 

Get in touch:

☎️ 0333 305 0956

SDLT Risks and How To Solve Them

SDLT Risks and How To Solve Them

SDLT has been the hot topic of the last few years, and that trend looks set to continue, regardless of the end of the Chancellor’s holiday.

With new surcharges being introduced all the time (the latest being the 2% Non-Resident Surcharge) there are more and more potential hazards for firms dealing with property purchases on both a residential and commercial basis. 

As claims against firms for missed reliefs rise, and the regulatory framework becomes tighter and potentially more costly, we look at some of the biggest risk factors when buying a property in the U.K. in relation to SDLT and how you can minimise them. 

Multiple Dwellings Relief 

Introduced in 2011, MDR has been the focus of a lot of attention in the last 18 months as it becomes clearer and clearer that many firms have not fully realised the potential for its relevance outside investment purchases of blocks of flats or large numbers of houses.

In fact, any property which may reasonably be defined as being multiple dwellings may qualify, including properties with so-called ‘Granny Annexes’ and larger properties with separate dwellings within their grounds.

These properties may qualify for MDR which can result in substantial reductions in SDLT (£10 – 87,000) but this is often not taken into account by firms and can lead to claims against them from disgruntled clients down the line.  

If there is any indication that a property might comprise of more than one dwelling, it’s always worth investigating to find out the precise details so that you can ascertain whether the relief might apply – a little additional work now can save a lot of pain later. 

Mixed Use 

If a property is not entirely residential, it may be mixed-use, which can in turn lead to a smaller SDLT bill.

Mixed-Use properties include those with commercial premises attached, substantial agricultural land or other additional land which is in use by a third party.

As with MDR, spending a little time at the start of a transaction establishing exactly what elements make up a property and how they are used can save the pain of a dissatisfied client and a costly claim later on.


In 2016, the Higher Rate on Additional Dwellings was introduced, also known as HRAD or the 3% Surcharge. In 2022 the Non-Resident Surcharge was introduced.

For both of these, it is critical to understand the exact position of the buyer in relation to the relative legislation in order to ensure the correct SDLT amount is paid.

Many factors can impact what might look like a straightforward rule, be it the precise circumstances of the buyer looking to acquire an additional residence or the precise nature of an individual’s residency when buying a U.K. property. 

Are You Confident Your Firm is Calculating SDLT Correctly?

A careful examination of the legislation and how it compares to your client’s circumstances is the obvious first step here, but seeking expert tax advice is also generally a good idea, whether from a specialist in your own firm or a third party adviser. 

Transfers between connected parties 

Often not picked up on, where a property transfer takes place either to or from a Partnership and “connected persons”, SDLT liability is zero.

One example is the transfer of a commercial premises of a company into the pension scheme of the company itself. Many such transfers are made, and in our experience legal advisers have often missed that these transactions qualify as zero SDLT transfers. 

When advising on a transfer, establishing whether any parties are connected should be one of the key considerations, regardless of the nature of the transfer itself. By ascertaining this, you could leave your client with the welcome news that they have no SDLT liability at all! 

And there’s more….

These are just some examples, of course. The truth of the matter is that with 49 reliefs, exemptions and exceptions in the SDLT legislation as of the time of writing  it is all too easy for a conveyancing lawyer to miss one or more  of these, which can do serious damage both to the reputation of the firm and their bottom line if claims result in increased PII premiums and/or a regulatory investigation.

With the Law Society’s requirement since 2019 for firms to produce detailed audits as to how SDLT figures are calculated and the SRA looking at increasing the maximum levels of fines it can apply to firms.

Now is the best time to ensure that your firm is protected from making these kinds of errors. 

So why use Compass?

Compass is the solution that can address all these problems as it is:

  • Capable of calculating SDLT accurately, taking account of all relevant factors;
  • Provides a detailed Audit Trail for the calculation
  • Indemnifies the calculation so you don’t carry the PI risk

Read our blog post: How SDLT Compass Can Help Your Firm

Compass has an intuitive interface and can be used as standalone package or easily integrated into any Case Management System.

So the question is not “Why should I use Compass?”

But rather “Why aren’t I already?”  

Get in touch with us for more details or enquiries:

☎️ 0333 305 0956

PII – are you confident that your firm is calculating SDLT correctly?

PII – are you confident that your firm is calculating SDLT correctly?

Why wouldn’t you be? Stamp Duty Land Tax has been in place now for nearly two decades, and it’s just the same as the old Stamp Duty, isn’t it?

Plus, HMRC provide a simple calculator on their website which is easy to use and the vast majority of transactions are quit straightforward and ‘normal’ meaning that reliefs and exemptions are a rarity you don’t need to worry about.

Well, have we got some news for you.

First of all, let’s talk about reliefs, exemptions and exceptions. Currently there are 49 in relation to SDLT, and that’s a number which can always grow. Those reliefs cover circumstances from a property being uninhabitable (and the quagmire of defining that status) to having land which is used for commercial purposes, having a separate dwelling as part of it (and the whole definitional quagmire that can cause) and various other assorted circumstances which might apply more often than you’d expect.

Blog post – 4 ways we can help you save on your Stamp Duty Land Tax

Let’s talk about the basics of SDLT itself. The slice system now in operation. The surcharges which currently apply for additional residential properties (Buy to Lets and Holiday homes) or non-UK residents purchasing in the U.K. and how even that apparently straightforward definition can catch out people you might not expect.

Let’s think of all the times that various governments have tweaked and massaged the SDLT rules in order to try to achieve some policy goal or other – the introduction of Multiple Dwellings Relief to encourage more BTL investment, the introduction of the Higher Rate on Additional Dwellings to try to discourage BTL investment and 2020’s ‘Holiday’ designed to stimulate a market which had stalled in the face of a global pandemic and the associated lockdowns.

Let’s remember that SDLT is not a tax on documents like the old Stamp Duty but a personal, self-assessed tax which attaches to the buyer and leaves them with full responsibility for its prompt and accurate payment.

How many of your ‘normal’ transactions might involve a buyer who can ill afford the potentially thousands of pounds they might erroneously pay in SDLT because you missed a relief or exemption which applied to their property?

Let’s talk about that HMRC calculator, and the fact that it isn’t nuanced enough to catch so many of these reliefs and exemptions. The fact that HMRC itself was quoted in a national newspaper saying the calculator was intended merely ‘as a guide’.

Read our blog post – 5 Ways Compass Improves on HMRC’s Stamp Duty Calculator

The fact that so many firms in the last eighteen months have seen rising numbers of claims against them from clients for missed MDR and other reliefs on purchases, and the subsequent hit to their firm’s reputation and PII premiums.

In the last quarter alone, PII costs rose on average by over 30%. How much more might that number rise for your firm if an error is made?

Compass is designed to solve this problem for you.

Intuitive, comprehensive and built to integrate easily into any existing case management system. It’s also been built with the latest CQS guidelines on SDLT in mind, ensuring that you will be fully compliant and able to produce the necessary audit trails and evidence of appropriate checks with no additional effort required.

Access a 14 day free trial for The UK’s only Fully Comprehensive Stamp Duty Calculator

The SRA’s Code of Conduct states, at Clause 4.3 that fee earners ‘are required to carry out their role and keep their professional knowledge and skills…up to date.’ A Compass Subscription is a cheaper, faster and easier solution to this with regards to SDLT than training your conveyancers to be tax advisers as well.

As you can see, if you want to make sure your stamp duty is right first time, every time, and that you make every saving to which you’re entitled, Compass isn’t just the best option – it’s the only option!

Call or email us today!
☎️ 0333 305 0956

Stamp Duty Calculator – How to know how much SDLT you’ll pay in 2022?

How to know how much SDLT you’ll pay in 2022

Almost every single person looking to work out how much SDLT applies to a purchase has turned to the online SDLT calculator since Stamp Duty Land tax was introduced nearly two decades ago.

Consequently, this SDLT calculator has served as the benchmark for buyers, estate agents, mortgage brokers, and solicitors.

But how accurate is the calculator? How much should you be relying on it and what happens if it gets it wrong?

Complexities of Stamp Duty Land Tax

First, the obvious: SDLT is complex. It is subject to near constant tinkering by the government of the day, usually in service of some policy goal or other, from encouraging investment purchasers (MDR) to discouraging investment purchasers (HRAD) to trying to stimulate the market in the middle of a pandemic by cutting it altogether on purchases up to £500,000.

Visit our Today’s Conveyancer profile, the leading source of information for residential property lawyers in England and Wales

As a result, that complexity means that any attempt to develop a calculator would be a Herculean task – requiring thousands of hours of investment and a complex algorithmic engine able to differentiate between dozens of different scenarios and regularly updated to take account of the latest changes.

The concern: The HMRC SDLT Calculator

HMRC’s calculator… isn’t that engine. It’s basic, asking a series of simplified questions and leaving out various nuances and details. Which might impact the final SDLT liability on a purchase. It is, at best an estimate.

Read our blog on Today’s Conveyancer – 5 ways Compass improves on HMRC’s stamp duty calculator!

Don’t take our word for it – in 2018 when answering queries posed to it on the calculator by a broadsheet newspaper, HMRC’s own spokesperson said that the calculator was intended merely as ‘a guide’ rather than a final arbiter of the SDLT due.

While it may be tempting to dismiss this as mere semantics, there is ample evidence that this matters. Claims against firms for MDR have shot up exponentially in the last eighteen months.

Rising PII Claims

Mixed-Use claims are rising.

Crucially, we are yet to see the full impact of the confusion around HRAD when it was introduced in 2016, which also persists to this day. But, anecdotal evidence suggests that a number of firms were making errors which may have cost or stand to cost their clients thousands of pounds.

As if that were not enough, consider that the cost of PII cover is rising significantly – more than 30% on average in the last quarter. It is becoming more and more expensive to keep small to medium-sized firms in operation, and that’s a trend which is only continuing in one direction.

Moreover, add in the SRA’s intention to raise the maximum amount of fines it can levy against firms and the Law Society’s CQS requirements on SDLT and the auditing required, and the costs of using a calculator intended to give you only a rough estimate start to shift into sharp focus.

The solution?

Compass is the difference maker that your firm needs. Firstly, it is built by a team of experts over a course of several years. Secondly, it is constantly monitored and updated in line with the latest developments. Therefore, Compass will guide you to the right answer first time, every time.

Compass will also:

  • Produce your CQS compliant audit trail
  • De-risk transactions by taking responsibility for SDLT calculations from the shoulders of your fee earners and firm
  • Provide peace of mind for your clients and your PII provider.

So, how much will Stamp Duty cost you in 2022? A lot less with Compass calculating your Stamp Duty.

The only real question is why you’d even consider not using Compass. 

Contact us today:

☎️ 0333 305 0956

4 Ways we can help you save on your Stamp Duty Land Tax

4 Ways we can help you save on your Stamp Duty Land Tax

Read the Farnworth Rose Solicitors blog post

With Stamp Duty Land Tax the subject of yet another current consultation, the whys and wherefores of this most complex of UK taxes stand to be altered once again.

With up to one in ten buyers already paying the wrong amount of Stamp Duty, it can’t help but feel that the dice are being rolled once again and those looking to buy property are the ones who will lose out.

Thankfully, with Compass in your corner, you can make sure that you pay what you should, and no more.

We’d like to share with you four features which help you to save money on the most expensive transaction you’re ever likely to undertake: 

1.            An extensive Database – Using the Compass database, our partner firms like Farnworth Rose, hold detailed information on every one of the (currently) 49 exemptions, exceptions and reliefs which exist in the SDLT legislation. This means that no matter how complex your purchase, or what particular reliefs might apply, you can be assured that we will find them.

2.            A full team – programmers, tax advisers and legal experts work together to make sure that the Compass database is constantly brought up to date with all the latest amendments, meaning that a change to the legislation won’t catch you or your solicitor unawares, and that you’ll get the maximum benefit of the law as it stands when you buy.

3.            A Comprehensive Audit Trail – Compass produces details of every transaction it assesses in the form of a full report, enabling your lawyer to provide the exact details of any reliefs claimed on your purchase when completing your SDLT return, ensuring things go smoothly.

4.            A full referral system – should your case prove especially complex or marginal, ensuring a human judgement where even the machine isn’t quite sensitive enough, or even a new suggestion on how to structure your purchase, could help you make a bigger saving.

To read more about how Compass can help your firm, read recent our blog post!

As you can see, if you want to make sure your stamp duty is right first time, every time, and that you make every saving to which you’re entitled, Compass isn’t just the best option – it’s the only option!

Call or email us today!
☎️ 0333 305 0956
Alternatively visit our website and join the growing number of UK firms making use of our award-nominated services. 

Access your 14 day free trial for the UK’s only fully comprehensive Stamp Duty Calculator

Multiple Dwellings Relief – Risk and Reward?

Multiple Dwellings Relief – Risk and Reward?

Stamp Duty is one of most used but least familiar taxes that Conveyancers face.

But, these are some common questions which legal advisers ask themselves on a frequent basis:

  • But when should it, and shouldn’t it, be claimed?
  • How is it calculated and how do I ensure I get it right?
  • How do I protect my practice from claims when its missed or miscalculated?

The problem:

The problem is, as conveyancing practitioners you’re not tax experts and you often rely on HMRC’s Stamp Duty calculator (or a version of its logic embedded in your Case Management System) – a calculator which the Revenue themselves have admitted is intended merely ‘as a guide’ rather than as a full-fledged final arbiter of the amount to be paid.

The calculators logic has flaws, meaning that if a purchase is eligible for any one of the (currently) 49 exceptions, exemptions and reliefs; MDR included it misses them and gives a false sense of security to someone relying on it. 

After all its HMRC so it must be right?  Yes?  NO….

A time for change:

The prime motivation behind the creation of Compass was the lack of accuracy and the inadequacy of detail in the questions within the HMRC Calculator.

By designing a bespoke system, using collaboration between tax and legal experts, we were able to devise a solution which would calculate the tax correctly first time, every time, and refer the case to a specialist where the answer wasn’t immediately clear.  

Currently, we estimate about one in ten purchasers pay the wrong amount of SDLT on their properties, and in recent months it has become clear that one of the biggest areas of missed reliefs relates to Multiple Dwellings Relief or MDR. 

The UK’s only fully comprehensive property tax calculator – 14 day free trial

MDR summarised:

MDR was added to the legislation back in 2011, with the express purpose of encouraging investment by landlords and other property investors. It removed a historical disadvantage to these groups that was caused by bulk purchases and/or linked transactions.

This meant that they paid SDLT on the aggregate price of all their units purchased, and this paid more SDLT than any other taxpayer buying a single one.

MDR works by taking the average value of each unit in a multiple property transaction (several properties bought together) and basing the SDLT charge for each property on that average figure that is then multiplied up buy the number of properties purchased. 

Thus, MDR removed the disadvantage caused by “aggregation” and brought the tax treatment of these types of purchases more into line with single unit purchases thereby incentivising larger and diverse property purchases. 

But whereas MDR is rarely missed in cases where it is obvious – a developer buying a block of flats or similar – it is rarely considered on smaller, but nonetheless qualifying purchases.

So, in what cases does MDR apply?

MDR may apply, for example, if you buy a property with a separate dwelling house in its grounds – a farmhouse or smallholding with a separate cottage in the grounds or a manor house with a separate workers buildings. 

MDR may also apply in cases where a property has a separate ‘Granny Annexe’ – as long as the place where elderly relatives are living is its own separate dwelling, with its own entrance and facilities, then it may well qualify the purchase as a whole for an MDR claim. 

In the past 18 months, as more people have become aware of how often this relief is missed, more and more claims have been made against solicitors by clients who have overpaid their stamp duty because of this error. It is now one of the biggest causes of claims against property law firms in the UK. 

Read our blog post – How SDLT Compass can help your firm

The solution:

Compass can help with this because, based on a  relatively few (well a few more than HMRC’s “calculator”) fact-based questions, it calculates the MDR, gives you a certified PI-backed calculation, an audit trial to put on your file and, if it thinks there’s an issue warns you that more detailed advice is needed. 

All in all it points you, the conveyancer, to a route to getting SDLT right – first time, on our PI risk not yours, and with all the records you need to meet your CQS or other regulatory requirements.

To find out more contact us:

☎️ 0333 305 0956

A Beginners Guide To Stamp Duty Land Tax (SDLT)

A Beginners Guide To Stamp Duty Land Tax (SDLT)

If you’ve ever bought and/or sold property in England, or indeed been paying attention to the news for the past year, you’ve likely heard the term ‘Stamp Duty’. SDLT stands for Stamp Duty Land Tax, which is referring to the exact same thing, only correctly.

Confused? You aren’t alone.

In fairness, the various terms people use for SDLT is possibly the least confusing thing about this property tax. Charged to the buyer on the transfer of property for consideration (payment, either in cash or other formats), and based on the amount of that consideration, most people don’t even realise that SDLT is a personal, self-assessed, tax.

This means that although you may have left your solicitor to work it out for you, responsibility for the amount paid lies with you as the buyer, not the lawyer. If it’s wrong, it’s down to you to rectify it, in other words.

How is it Calculated?

SDLT is calculated these days on a ‘Slice’ system – rather than being calculated as a simple percentage of the total purchase price of the property, there are differing percentages to pay on different parts of the purchase price:

Residential Property Purchase Price SDLT Rate Non-Residential Property PriceSDLT Rate
Up to £125,000 Zero Up to £150,000 
The next £125,000 (from £125,001 – £250,000) 2% The next £100,000 (the portion from £150,001 to £250,000) 
The next £675,000 (from £250,001 to £925,000) 5% The remaining amount (portion over £250,000) 5%
The next £575,000 (from £925,001 – £1.5 million) 10% 
The remaining amount (portion above £1.5 million) 12% 

In short, the more expensive the property, the higher the SDLT cost, and the more complexity is involved in working it out. And that’s just the tip of the iceberg.

The rates above apply to residential property in normal circumstances. However, the government has a habit of tinkering with SDLT quite often, for policy reasons.

Get your Stamp Duty calculated correctly, first time, every time! Access your 14 day free trial for Compass SDLT Calculator here

And then there’s Surcharges…

You’ll likely be aware of the Higher Rate on Additional Dwellings, also known as the 3% surcharge?

If you are buying an additional residential property – say a buy to let or a holiday home – then this change, made in 2016, means you’ll be subject to a ‘surcharge’ of 3% on the purchase price, on top of any other SDLT you might normally pay.

That means – for those paying attention – that there is no 0% rate band on these purchases, as even at £125,000 or lower, you are paying 3%. You are able to reclaim this if you go on to dispose of your current main residence within a certain period of time, but that’s assuming that you were not subject to one of the exclusions at the time of purchase.

If you haven’t lived in the UK for more than 6 months in the year before purchase then you’ll also be asked to pay a further 2% Non-Resident Surcharge….. Making the top rate of SDLT 17%!

Now that’s a (49) Relief

If you bought multiple properties in the same transaction, you may have been eligible for Multiple Dwellings Relief, which can substantially reduce your SDLT bill on such purchases, but is often missed by conveyancers.

Buying a property with land or an annexe attached? Different rates may apply. Buying a commercial property? Different rates definitely apply.

Errors and Guides

In our experience, a lot of transactions go through with the wrong amount of Stamp Duty Land Tax being paid – SDLT Refunds, which specialises in recovery of overpaid Stamp Duty, has recovered over £15 million in overpaid SDLT to date.

This is partly thanks to the complexity of the rules catching many conveyancers out, and partly due to the insufficiency of the tools provided by HMRC, upon which most of them rely.

HMRC’s SDLT calculator misses many of the nuances that can lead to different results for an SDLT calculation from the norm, and HMRC themselves have gone on record as saying it is intended merely as ‘a guide’ rather than a definitive answer.

The Definitive Answer

Compass was designed to solve all of these issues, for property lawyers and their clients. Built with the input of Chartered Tax Advisers and Conveyancing solicitors.

Compass is a dedicated tool designed to assess any type of purchase and ensure the right Stamp Duty result is produced. Constantly updated to reflect the latest changes in SDLT legislation, fully insured and backed up by the personal advice of the UK’s leading experts on the subject, it’s the best way to ensure that the right Stamp Duty is paid first time, every time.

Our growing network of law firms all agree that Compass is the safest, most reliable way to calculate your Stamp Duty liability – ask your lawyer today if they’re using us, and if they aren’t, why?

Get in touch today to receive an accurate, insured and indemnified Stamp Duty Calculation:

☎️ 0333 305 0956

How SDLT Compass can help your firm

How SDLT Compass can help your firm

It’s quite likely that, up until the last few years, Stamp Duty Land Tax has not been a pressing subject in the minds of many UK Property Lawyers. Payable on all transactions above £125,000 at the moment, it’s hardly the most complex looking or exciting part of a property transaction, after all. You calculate the percentage, fill out the return and that’s an end to it. 

In the last few years though, that has begun to very much not be the end to it. Study after study shows a steady increase in claims against firms from dissatisfied clients, encouraged by so-called ‘claim farms’ for missed SDLT reliefs on UK Property.

Recently, this has revolved mainly around Multiple Dwellings Relief, but other reliefs such as Mixed Use are waiting in the wings.  

This has meant increased PII premiums, in a market already squeezed by a dwindling pool of providers, and billable time spent by firms and their principals going over historical case files and responding to dozens, sometimes hundreds of these types of enquiries month after month.

In a competitive market with costs always on the rise, it’s something that can mean the difference between being able to continue practising or not for many small-to-medium-sized firms. 

Part of the issue lies with lack of awareness of the ever-changing nature of SDLT itself. Since its inception in 2003, the tax has barely stood still, legislatively speaking, from one year to the next.

The UK’s only fully comprehensive property tax calculator: 14 day free trial

Aside from the various high-profile adjustments made by successive governments, of which the recent ‘holiday’ was the latest, there are now 49 different reliefs, exemptions and exceptions attached to the tax, and more will inevitably follow. 

But the greater part of the issue lies with the tools provided to address the tax. HMRC’s Stamp Duty Calculator, provided online by them, is woefully inadequate when it comes to considering these various reliefs.

HMRC itself has acknowledged publicly that the calculator is in fact intended merely as ‘a guide’ rather than a final answer, and its technical deficiencies mean that it is the root cause of many missed reliefs on SDLT. 

5 Ways Compass Improves on HMRC’s Stamp Duty Calculator

Compass was designed with all these factors in mind. More than a simple ‘calculator’, Compass is based on complex and bespoke algorithms, designed to take account of every single relevant factor in a transaction which may impact the SDLT calculation.  

Built in conjunction with expert tax advisers and conveyancing solicitors, Compass has been designed to be as intuitive and simple to use as it is comprehensive.

Its user-friendly interface can be integrated into any existing Case Management System. It will produce a detailed audit trail for each transaction showing how the figure was reached, ensuring compliance with CQS requirements.

Best of all, where a case is marginal on the facts, it will refer your client to an expert tax adviser who can personally examine their matter and advise on the correct outcome. 

Click here to find out more about Compass SDLT Calculator

What this means for your firm cannot be easily overstated. Aside from the obvious saving of time on additional training for your fee earners and staff to keep abreast of every new SDLT development and every new regulatory requirement, Compass acts to mitigate your own risk.

Backed by full PII cover of its own, it enables you to effectively delegate one of the most serious potential areas of risk on your conveyancing caseload.

This means fewer potential claims against your firm, which should translate to lower PII premiums – a literal lifeline to many firms in the current environment. 

Call or email us today!

Alternatively visit our website and join the growing number of UK firms making use of our award-nominated services. 



Read the full article here

“Mitigating risk in your conveyancing business was on the agenda at the latest Today’s Conveyancer industry roundtable.

Welcoming Marc Rowson of Lockton Companies LLP and Hannah Mackinlay of SDLT Compass, the discussion centred on the ways in which firms can demonstrate to their insurers how they are taking a proactive approach to client service and risk management.

Against a backdrop of significant increases in professional indemnity insurance for many conveyancers, in some cases in excess of 20%, the insight from Lockton’s Marc Rowson was a useful reminder of the challenges for law firms, brokers and insurers.

The latest round of renewals saw the continuation of what is known as a “hard” insurance market; typified by large scale claims, the eroding of capacity as insurers exit, and rate rises.

Indeed Marc highlighted the continued use of personal partner guarantees from some Insurers, for unpaid excess or run off premium as evidence of insurers adopting an even more cautious approach.

An increase in the frequency and severity of claims, alongside larger asset values (having seen house prices increase nearly £30,000 over the last 11 months)  means claims are much larger.

We are yet to see the full impact of the industry’s switch to home working and the associated professional and personal challenges. Juggling working from home, childcare and home learning commitments, alongside the increase in workload caused by the SDLT holiday may yet see claims rise. Marc identified that supervision and the absence or lack of peer review contributed to claims.

When it comes to the future, insurers are very interested to understand how firms are managing staff, ensuring the relevant supervision and risk mitigation is in place where firms continue to embrace remote working.

SDLT Compass – The UK’s only fully comprehensive Property Tax calculator

“You can be sure,” says Marc, “should claims start to arise with remote working at the core, insurers will be delving deeper into this particular topic.”

One area of risk is the misunderstood area of Stamp Duty Land Tax, a misleading name in itself, according to expert Hannah Mackinlay.

Too many  conveyancers don’t fully understand SDLT, says Hannah. The rate of taxation is dependent on more than the purchase price. There are 49 different SDLT reliefs.

For Hannah, too many conveyancers jump to conclusions, making assumptions about the property, and those involved.

“The reliefs are as relevant to individuals as they are the bricks and mortar. Where is the buyer resident, or if it’s a company where is it resident? What other property is part of the deal? Could there be linked transactions either before or proposed? Do they get hit for Higher Rates for Additional Dwellings (HRAD) or are they joint owners of other residential property anywhere in the world?”

“For me trust arrangements, family businesses and connected parties, and partnership arrangements are just some of the examples that open up a can of SDLT worms!”

She describes the current attitude toward SDLT as a human tendency to just keep doing the same thing whereas in fact conveyancers could be putting themselves at risk of claims by ignoring the risk.

In one case, SDLT Compass, an automated SDLT risk mitigation tool for residential property practitioners, identified a £1m SDLT over payment.

As Marc pointed out in his conclusion in our modern, more litigious society, this is not a risk that insurers have the appetite for.”


Get in touch to find out how Compass can help your firm:

☎️ 0333 305 0956

5 Ways Compass Improves on HMRC’s Stamp Duty Calculator

5 Ways Compass Improves on HMRC’s Stamp Duty Calculator

When it comes to Stamp Duty, for a long time there has only been one way to calculate what’s owed. HMRC’s online Stamp Duty Calculator has long been the sole port of call for solicitors, estate agents, mortgage brokers and buyers looking to work out HMRC’s due on the purchase of a new property. 

But how good is that calculator?

The UK’s only fully comprehensive property tax calculator – 14 day free trial

Recent surges in claims against law firms for missed reliefs and the proliferation of ‘Claim Farmers’ offering homeowners the chance to claim refunds on their Stamp Duty suggests “not very”– thank goodness there’s now an alternative. 

Designed specifically to address the shortfalls in HMRC’s online calculator, here’s five ways Compass gets the job done better: 

1.Built to Law Society Standards

In 2019 the Law Society amended its Conveyancing Quality Scheme guidelines to require that member firms keep a detailed record of how SDLT liability was calculated on each property transaction, including a detailed audit trail. Compass was designed with this requirement in mind, and is fully compliant with these requirements. 


Compass is backed by full Professional Indemnity Cover, providing a fully accountable service to all users. In the extremely unlikely case of an error or miscalculation, a client has the reassurance of this backup, instead of a faceless online government portal which leaves responsibility solely in the hands of the user. 

3.Designed by experts 

Compass has been built from the ground up to be the best solution to the issue of SDLT calculation, with input from expert tax advisers, conveyancing lawyers and a dedicated programming team.

By examining SDLT in its entirety, they have been able to design a tool more comprehensive, user friendly and accurate than the HMRC version. 

4.Linked to Expert Advice 

Compass provides not only the most sophisticated and comprehensive algorithms to calculate Stamp Duty liability based on all relevant factors, but is also backed by expert advice.

Where cases are marginal or excessively complex, Compass will refer them to an expert adviser who will examine the case and provide detailed advice as to what the liability should be. 

5.Constantly Updated 

Compass is subject to a regime of continuous updates, small and large. SDLT is one of the most regularly updated and amended taxes on the UK statute books, with new reliefs, adjustments to thresholds and evolving surcharges a more or less regular occurrence.

Only by having a system regularly monitored and updated by a team of experts can one hope to maintain accuracy in calculating the liability. 

It’s not hard to see that Compass provides the superior service. Designed to catch all 49 current reliefs which exist within the legislation, built to be easy to use and subject to regular updates and monitoring.

The only real question is why you’d even consider not using it. Contact us today:

☎️ 0333 305 0956