The Conveyancing Association (CA) has welcomed new HMRC guidance on Stamp Duty Land Tax (SDLT) registration requirements, but warned that increasing complexity within the tax regime is creating growing challenges for conveyancing firms.
The guidance confirms that conveyancers must register as tax advisers in order to obtain the credentials needed to submit SDLT returns and make payments on behalf of clients. However, the CA has stressed that registration should not be viewed as evidence that conveyancers are qualified, regulated or insured to provide tax advice.
The trade body said firms are facing increasing difficulties when assessing SDLT liabilities, reliefs and exemptions, with more than 30 separate reliefs and exemptions now available alongside a growing range of ownership structures and transaction types that can affect tax treatment.
Issues involving trusts, company ownership, multiple purchasers, mixed-use property, first-time buyer relief and higher-rate charges can all have a significant impact on SDLT liabilities, the CA noted, often requiring specialist expertise to determine the correct position.
As a result, the Association said many firms are reviewing how they manage SDLT-related work, including whether to develop in-house expertise or seek specialist support for more complex cases. It added that while responsibility for submitting SDLT returns remains with the conveyancer, firms must ensure they have appropriate processes in place to manage compliance risks as the tax regime continues to evolve.
To read the full HMRC ‘Mandatory Tax Adviser Registration’ Guidance, click here.
Nicky Heathcote, non-executive chair of the CA, said: “The publication of HMRC’s guidance provides clarity on the practical steps firms will need to take in order to continue submitting SDLT returns. However, it also highlights an important distinction which we have been raising for some time.
“Registration as a tax adviser for HMRC purposes should not be confused with the provision of tax advice. Conveyancers are required to register in order to fulfil their role in the transaction registration process, but that does not mean they are qualified, regulated or insured to provide detailed tax advice to clients.
“SDLT has become increasingly complex. There are now dozens of reliefs and exemptions, together with a wide range of ownership scenarios and purchasing structures that can significantly affect tax liabilities. In some cases, determining the correct SDLT position requires highly specialist knowledge and expertise.
“Many firms are now asking difficult questions about how they manage SDLT-related matters. Some may decide specialist support is appropriate for every case, others may choose to develop internal expertise, while some may seek specialist input only where transactions become more complex.
“There is no simple answer and each approach brings its own risks. Even identifying whether a matter is straightforward or complex can raise important questions. Ultimately, conveyancers remain responsible for submitting the SDLT return and firms will need to consider carefully whether they have the expertise, processes and protections in place to support the approach they adopt.
“There is also a consumer education piece here. Firms should be clear about the services they provide and the circumstances in which independent SDLT advice may be required. The term ‘tax adviser’ clearly carries certain expectations and it is important clients understand the difference between administrative submission of SDLT returns and the provision of specialist tax advice.
“As the tax regime continues to evolve, it is important consumers can access appropriate advice when complex SDLT issues arise and conveyancing firms are clear about the scope of the services they provide.”
