HMRC has hit back at claims that millions of households across the country are overpaying on stamp duty that featured in new research.
Tax expert group Cornerstone is reporting that taxpayers are overpaying on the levy by a shocking average of £27,000.
According to the tax specialist, HMRC is taking longer than the six-week period to handle refund claims.
The number of cases exceeding this timeframe has risen with just 36 percent being within the target period last year.
According to Cornerstone, the firm has successfully reclaimed more than £30million back in overpaid stamp duty relief over the last three years with the majority being linked to Multiple Dwellings Relief, Uninhabitable Status and Pensions.
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What is stamp duty?
Stamp duty land tax (SDLT) is a levy which is charged on someone when purchasing a home and/or a second home.
Those residing in England and Northern Ireland will need to pay this tax if the price of the property reaches a certain threshold.
No stamp duty is paid on a home’s purchase of up to £250,000 or £424,000 for first-time buyers.
Some five percent of the property price is charged for prices on main residences between £250,001-£925,000 and eight percent for additional properties between that amount.
One of the 180 clients Cornerstone has successfully represented in getting returns back from stamp duty is Mr Peter Loyal who received £18,500 back.
He held a residence in a property investment partnership and transferred the property into a connected pension trust scheme which was transferred at market value on May 4, 2016 for a consideration of £580,000 and SDLT of £18,500 was paid.
However, it was found that since the translation was a transfer from a partnership to a connected pension trust scheme, a certain provision under schedule 15 had to be applied.
Due to this, no stamp duty was due and no return was required as it was not a notifiable transaction.
David Hannah, group chairman of Cornerstone Tax, recommends that those affected by this issue reach out for support to get their hard-earned cash back.
He explained: “By conducting a thorough analysis, seeking professional advice, and understanding the applicable regulations, you can minimize the risk of overpaying SDLT.
“However, if an overpayment does occur, initiating a review promptly allows you to rectify the situation, gather evidence, and pursue appropriate actions to claim a refund or make adjustments as required.”
But HMRC has hit back at the claims, warning the public that all may not be as it seems.
An HMRC spokesperson said: “Many of the Stamp Duty Land Tax (SDLT) claims we receive from repayment agents are wrong and some will make incorrect claims just so they can charge a fee.
“If someone promises easy money and it sounds too good to be true, it probably is. Where a claim is wrong, the purchaser is liable to pay back all the tax that was refunded, with interest and could also have to pay a penalty of up to 100 percent of the tax refund.”
