Adverts suggesting large tax repayments are not new. Over recent years there has been a spate of R&D and capital allowance adverts claiming large tax reclaims and SDLT appears to be the next tax on the agenda for this approach.

Often the service is advertised on a no-win, no-fee basis, so it’s a no brainer, right?

Might as well give it a go?

It is important to consider these claims and your circumstances fully before making a claim and to be careful of the claims made by these repayment agents.

No-win, no-fee, so what is a win?

HMRC operate a repay now, check later approach to most repayment claims. This means that if you receive a refund, it does not mean HMRC have accepted it. HMRC will likely have a year, or in the case of SDLT often nine months to query a claim. Therefore, be careful of what is being described as a “win” and any success claims made by these repayment agents.

Are you actually due a refund?

There are situations in which an SDLT refund may be due, for example you qualify for a refund of the additional 3% paid on your new home now that you have sold your previous residence. Or your return may have been incorrect and a potential refund due to you. These would need to be amended within 12 months of the original return being filed. There would also have to of been an error on the original return, for example the purchase price misstated, or property miscategorised.

It may be the case that a claim for relief is available but not claimed on your return. This could be for multiple dwellings relief or that your property was of mixed use rather than solely residential. Care is needed if this is claimed to be the case as a number of these situations have gone to tribunal over the last few years. It is therefore important that your situation has been fully reviewed to ensure that you do qualify for the relief before a claim is made.

Remember, it is your return and your claim being made. If this is challenged by HMRC they will want to understand why you have made the claim and if it is seen to have been incorrect they could look to charge interest and potentially penalties on the amount you have incorrectly had refunded to you.

What should I do?

If you have been contacted by an SDLT repayment agent, think that you may have overpaid on a recent purchase, or are about to buy a property and think you may qualify for a relief, then obtain advise on your SDLT position to ensure you understand and are happy that the relief applies.

At Rickard Luckin we have assisted a number of clients with their SDLT position to ensure that the amount of SDLT paid is correct.

This article is from the latest edition of our A Matter of Tax newsletter. To receive future copies of any of our newsletters directly to your inbox, please visit our preference centre to register your interest.