The tax grab will see many homeowners pursued for unpaid tax, interest and penalties after solicitors and conveyancers wrongly completed and filed tax returns.
Irregularities across a number of legal firms have been revealed, and HMRC has been in touch with some homeowners who have been innocently caught in the problem.
Compensation of £12.3 million has already been made by the Solicitors Regulation Authority for claims against just one at fault firm - Wolstenholmes of Cheshire.
The homeowners are not at fault, as they paid the correct amount and trusted that the conveyancer would hand the money over to HMRC. But some conveyancers put a lower purchase price on tax returns, collected the right amount of cash to pay the stamp duty bill but paid less than they should.
Homeowners are now being told that they must pay the missing amount, plus interest, even though they were not to blame.
In law, buyers must ensure the Stamp Duty Land Tax return is filed and the correct tax paid. They may be able to seek compensation from their solicitor or conveyance.
HMRC says it contacts homeowners if there is a discrepancy between what should have been paid and what has actually been received. This can come as a shock, as buyers expect the money to be sent through by their solicitor.
One law firm that has not followed the rules is Wolstenholmes of Cheshire. The Solicitors Regulation Authority (SRA) took action in 2009, suspending the licences of five of the firm’s solicitors and then closed the practise. But problems are still coming to light, with one client only finding out last December that she owes HMRC nearly £10,000 in stamp duty. The firm had given the purchase price as £126,000 lower than what she had paid.
The client is claiming money back through the legal ombudsman.
Five of the firm’s solicitors are facing a substantive hearing at the Solicitors Disciplinary Tribunal. No criminal proceedings outstanding against former employees.
