News In Focus
6 September 2005
Revenue admits interest power blunder
HM Revenue and Customs is to refund all interest charged on late payments of stamp duty land tax after admitting that it had no power to charge interest – or to pay it on repayments of tax.
The omission in the SDLT legislation came to light when preparations were being made for the change in interest rates on unpaid and overpaid tax on 6 September 2005.
Any interest paid will be fully refunded and HMRC will pay interest (at 2.25%, the normal rate on repayments) on the amounts repaid. HMRC will contact each purchaser affected and their agent, where applicable, as soon as possible to repay the monies. It is likely that smaller amounts will simply be repaid and (for security reasons) larger amounts may have to be claimed. For further information, see the website http://www.hmrc.gov.uk/so/index.htm . Customers are requested to wait until they are contacted. All customers will have been contacted by 31 January 2006.
The legislation has been amended to permit interest on late payments of SDLT to be charged from 26 September 2005.