Due to coronavirus (COVID-19) HMRC has temporarily changed the way they deal with Stamp Duty.
Stamp Duty is paid on shares bought on a stock transfer form.
It should not be confused with paying Stamp Duty Reserve Tax which is paid on the paperless purchase of shares, or paying Stamp Duty Land Tax when property is bought or transferred.
The deadline for paying Stamp Duty and getting stock transfer documents to the Stamp Office is no later than 30 days after they’ve been dated and signed.
How to pay Stamp Duty to HMRC during the pandemic
If you send HMRC payment by cheque it will not be banked until coronavirus (COVID-19) measures end. This means the transaction you have sent details of to HMRC by email will not be processed.
Email: email@example.com if you cannot make an electronic payment.
You’ll need to provide a payment reference so that HMRC can identify your payment. Use your name followed by the payment amount (no spaces), for example: BGates/240.00.
If you’re a solicitor or adviser making a payment on behalf of your client you can use your client’s reference or matter number as the payment reference.
Your payment could be delayed if you use the wrong reference.
Use the following details to make a payment from a UK account.
Sort Code: 08 32 10
Account Number: 12001098
Account Name: HMRC Birmingham Stamp Office
How to report transactions to HMRC due to the pandemic
Due to the special COVID-19 restrictions, you cannot post details of the transaction to HMRC. After you have paid your Stamp Duty you must email details to HMRC at:
Your email should include:
• the payment reference
• the payment amount
• the date of payment
• an electronic copy (for example, a scanned PDF) of either your:
o signed and dated stock transfer form
o instrument of transfer
o form SH03 for return of purchase of own shares
HMRC will accept e-signatures while coronavirus (COVID-19) measures are in place.
If your stock transfer form or instrument of transfer does not include them, you will also need to give details of the:
• name of the company whose shares are being transferred
• shares being transferred including date of transfer
• parties to the transaction
• amount of consideration
HMRC will contact you by email if they have any questions. If HMRC do not have any questions and are able to process your transaction, they will send you a confirmation letter by email. No stock transfer forms are currently being stamped
Penalties for late filing
Penalties for late submission are calculated and charged on a document by document basis. These are additional to the Stamp Duty due.
Length of delay Amount of penalty
Documents late by up to 12 months 10% of the duty, capped at £300
Documents late by 12 to 24 months 20% of the duty
Documents late by more than 24 months 30% of the duty
HMRC will not charge a penalty that’s less than £20 and penalty amounts will be rounded down to the nearest multiple of £5.
Interest on late filing
If you do not pay the full amount of Stamp Duty on time you’ll have to pay interest daily up to the day you pay it. This is on top of any penalty you have to pay for sending in your documents late.
The amount of interest you pay depends on:
• how late the payment is
• how much duty you owe
HMRC uses the official rate of interest set by HM Treasury (currently 2.75%) to work out how much you have to pay. If the interest works out at less than £25 per document, you will not have to pay it.
SRC-Time are one of the South East’s leading accountancy firms in advising businesses in all aspects of their accounting and tax affairs and we are able to assist in any issue raised above.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at firstname.lastname@example.org or speak with an account manager to get any process started.