Processing delays at the land registry causing HMRC to go after tax that isn’t due
08 November 2022
The land registry has suffered incredibly long processing delays since the covid-19 pandemic began which seem to still be continuing. Many taxes are impacted by land registry data and delays caused by not processing the transactions in a timely manner has led to HMRC raising tax assessments incorrectly.
Recently we have seen a client receive an assessment for tax under the annual tax on enveloped dwellings (ATED) regime for a large sum despite the property having been sold 18 months ago. HMRC stated that this was due to the property still showing as in their ownership on the land registry and requiring confirmation by way of the signed transfer forms before being able to remove the determination – although the position was rectified, it wasn’t without stress and worry.
It could also impact HMRC’s view on other property taxes such as stamp duty land tax (SDLT) – if you are looking to reclaim a surcharge for additional dwellings but the land registry does not reflect a recent property sale, could this be a hinderance?
It is important to note that this may not just impact things from a tax perspective – those who are perhaps looking to sell properties that haven’t yet been processed with land registry from the initial acquisition will find this process stalling, at best.
With unnecessary headaches and professional fees on the line, you should be aware of the ongoing backlog and the impacts this may have. Overall, it seems that ensuring that you have clear detailed legal documentation is key for use as evidence as we continue to deal with disruption and delays from the coronavirus pandemic.
Recently we have seen a client receive an assessment for tax under the annual tax on enveloped dwellings (ATED) regime for a large sum despite the property having been sold 18 months ago. HMRC stated that this was due to the property still showing as in their ownership on the land registry and requiring confirmation by way of the signed transfer forms before being able to remove the determination – although the position was rectified, it wasn’t without stress and worry.
It could also impact HMRC’s view on other property taxes such as stamp duty land tax (SDLT) – if you are looking to reclaim a surcharge for additional dwellings but the land registry does not reflect a recent property sale, could this be a hinderance?
It is important to note that this may not just impact things from a tax perspective – those who are perhaps looking to sell properties that haven’t yet been processed with land registry from the initial acquisition will find this process stalling, at best.
With unnecessary headaches and professional fees on the line, you should be aware of the ongoing backlog and the impacts this may have. Overall, it seems that ensuring that you have clear detailed legal documentation is key for use as evidence as we continue to deal with disruption and delays from the coronavirus pandemic.
Michaela Norman
Associate Director
AUTHOR
Michaela Norman
Associate Director
