SDLT Mitigation schemes.......buy cheap, buy twice!
Discussion
Completed on the current house in April 2010.
Just got a letter from HMRC telling us the conveyancing firm we used has ceased trading following action from the Solicitors Regulation Authority and they are now carrying out a review of the SDLT returns submitted by the firm on behalf of their clients.
It then states "we will contact you in the next few weeks if we need to check any part of your SDLT return".....
It's in the distant past but I've still got the solicitor email exchanges of me querying this as I didn't understand what the chuff it was all about. Essentially instead of paying circa £1500 to the HMRC in SDLT we paid a fee of £700 to the firm who then assured me they were implementing a scheme that somehow circumvented payment of SDLT and that after a period of 9 months it could be assumed it was successful.....whatever that means. 3+ years have passed and this was a distant memory.
If it's too good to be true and all that!!....
So it looks like my christmas present from HMRC may well be a bill for £1500+ interest + whatever else they deem necessary.
Just thought I share in case anyone else is contemplating using an apparently cheap conveyancing firm.....think twice.
Just got a letter from HMRC telling us the conveyancing firm we used has ceased trading following action from the Solicitors Regulation Authority and they are now carrying out a review of the SDLT returns submitted by the firm on behalf of their clients.
It then states "we will contact you in the next few weeks if we need to check any part of your SDLT return".....
It's in the distant past but I've still got the solicitor email exchanges of me querying this as I didn't understand what the chuff it was all about. Essentially instead of paying circa £1500 to the HMRC in SDLT we paid a fee of £700 to the firm who then assured me they were implementing a scheme that somehow circumvented payment of SDLT and that after a period of 9 months it could be assumed it was successful.....whatever that means. 3+ years have passed and this was a distant memory.
If it's too good to be true and all that!!....
So it looks like my christmas present from HMRC may well be a bill for £1500+ interest + whatever else they deem necessary.
Just thought I share in case anyone else is contemplating using an apparently cheap conveyancing firm.....think twice.
Not anything I know/knew anything about. It was offered to us by the case handling solicitor so I assumed that if it wasn't above board it was at least compliant with the law.
Not unsurprisingly, they have ceased trading
http://www.sra.org.uk/consumers/solicitor-check/53...
Not unsurprisingly, they have ceased trading
http://www.sra.org.uk/consumers/solicitor-check/53...
anonymous said:
[redacted]
It was Abode Solicitors Lts trading as Arc Property Solicitorshttp://www.sra.org.uk/consumers/solicitor-check/53...
I assume that given the above there is nobody to chase and I'm quite possibly a bit fooked. I may ring the number on the letter and try to determine what action is likely to be taken.
Just what you need at Christmas, ha. You live and learn.
KTF said:
I would drop your trousers, bend over and prepare for the worst.
If it doesn't happen, then consider yourself lucky.
I may not ring the number then and hope for the best.If it doesn't happen, then consider yourself lucky.
Looks like I've been somewhat hoodwinked. What an utter
!I assume my options are limited to either
a). Hope I don't get another HMRC letter
b). Get ready to pay up
Do the HMRC do monthly installments? They're a friendly bunch aren't they?
Interesting it's not just me then!
The crafty fvckers eh?
Rang the firm dealing with the SRA shutdown and was advised to just watch and wait, nothing else from HMRC just yet but it's early days. Obviously they will be waiting a bit so we get a demand for money in the last post before christmas day
I'm mentally prepared to receive some form of demand though; worst case it will be for the full amount + what we already paid the dodgy geezer + fines. Best case it'll be the full SDLT and we might be in a position to claim back the amount paid to dodgy geezer (£900 inc VAT) net result being we pay up the amount saved using this scheme.
We shall see anyway.
The crafty fvckers eh?
Rang the firm dealing with the SRA shutdown and was advised to just watch and wait, nothing else from HMRC just yet but it's early days. Obviously they will be waiting a bit so we get a demand for money in the last post before christmas day
I'm mentally prepared to receive some form of demand though; worst case it will be for the full amount + what we already paid the dodgy geezer + fines. Best case it'll be the full SDLT and we might be in a position to claim back the amount paid to dodgy geezer (£900 inc VAT) net result being we pay up the amount saved using this scheme.
We shall see anyway.
Andehh said:
I would advise getting all paperwork together and in order. Reading the letter they sent us when I enquired about the schene they make it explicitly clear it is fully legal and not an issue from a fraud/avoidance point of view. They also explain they are professionally positioned to advice, though other lesser & riskier schemes are avaliable. I would plead that.
Happy to provide you a copy if you so require!
If you could do that I'd be very grateful. All I have is the email correspondence and it isn't crystal clear what went one. In fact the whole deal was done via email as far as I remember.Happy to provide you a copy if you so require!
Is what you have in paper format or electronic. I'll send you a PM if that's ok.
Muncher said:
Was there any explanation of what the scheme was, how it would be structured and what their fee would be?
Their fee was 50% of the SDLT total +VATIn my case this amounted to circa £900.
Essentially you paid the full SDLT value to the solicitors, they implemented the scheme and then credited back the difference.
The only answer to this issue is that at some point it's very likely the HMRC will want the SDLT to be paid if hasn't been already. They are very likely to chase me for this. The mitigating factor is the fact that I trusted a professional, offering a seemingly professional service to operate within the law. Mr Ali has obviously had some difficulty with this and landed me, an entirely lay person (and likely several others) right in it, whilst at the same time pocketing some serious cash.
I'm hopeful that I may be in a position to claim back the fee paid using the SRA compensation scheme which will go a long way to offset the total SDLT owed. I'm not going to complain about having to pay it, I'd just rather not piss £900 down the bog in support of Mr Ali's luxury lifestyle.
I had a chat with a nice chap at hmrc and he was of the opinion that given we acted in good faith then any penalty could well be waived.
It's all up in the air at the moment though, I need to post any and all correspondence I have to hmrc and we can take it to from there.
Don't get me wrong, knowing what I know now I'm not whinging about having to pay the tax, it's just ensuring we aren't penalised due to the actions of a proper bent solicitor that I'm hoping to swerve.
It's all up in the air at the moment though, I need to post any and all correspondence I have to hmrc and we can take it to from there.
Don't get me wrong, knowing what I know now I'm not whinging about having to pay the tax, it's just ensuring we aren't penalised due to the actions of a proper bent solicitor that I'm hoping to swerve.
So,
In a nutshell
It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
Anyway, I've drafted up a detailed letter to the HMRC disputing the claim that I owe them anything and have all the emails/invoices printed out to support this. The annoying thing is that just after speaking to HMRC (who are very pleasant to deal with btw) I went and made a payment toward the amount owed (allegedly) on advice from the repayment dept chap who suggested that although they like the full amount paid that you can just put in an amount as and when to pay down the debt; looks good if the repayment enforcers (or whatever they're called) start looking at the case. Anyway, I've asked for this back while they make a final decision.
My wife does get some level of legal services with her union so before I get all gung ho and fire off my letter we're going to see if they can offer any advice on how to proceed.
Kick in the balls anyway, My Mrs just finished maternity leave so we are totally skint (overdrawn in fact)....could do without this st! 
In a nutshell
It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
Anyway, I've drafted up a detailed letter to the HMRC disputing the claim that I owe them anything and have all the emails/invoices printed out to support this. The annoying thing is that just after speaking to HMRC (who are very pleasant to deal with btw) I went and made a payment toward the amount owed (allegedly) on advice from the repayment dept chap who suggested that although they like the full amount paid that you can just put in an amount as and when to pay down the debt; looks good if the repayment enforcers (or whatever they're called) start looking at the case. Anyway, I've asked for this back while they make a final decision.
My wife does get some level of legal services with her union so before I get all gung ho and fire off my letter we're going to see if they can offer any advice on how to proceed.
Kick in the balls anyway, My Mrs just finished maternity leave so we are totally skint (overdrawn in fact)....could do without this s
t! Db36 said:
Hi
I hope you don't mind me replying as I received a letter from hmrc today. I have gone through all my correspondence from the purchase 4 years ago and I clearly asked them to explain more about the stamp duty as I didn't understand. However due to the pressure of everyone wanting to complete I carried on with it all.
What do I need to do as I can either pay it or dispute it as like dave I would have paid 900 to abode on top of the stamp duty of 1.5k if I pay it to hmrc. Double whammy.
What evidence have you put together dave? I have info via email about what the SDLT was about but I had signed the SDLT in which they had already filled in along with all the completion statements (which included 1.5k stamp duty), contracts etc. Do I need to contact stevensons solictors to see if I can get the £900 back? Is that right that they will charge £500 to take on the case and realistically can they really get hmrc to waive the stamp duty as I don't want to lose another £500.
Vin
Sorry to hear you are also having trouble.I hope you don't mind me replying as I received a letter from hmrc today. I have gone through all my correspondence from the purchase 4 years ago and I clearly asked them to explain more about the stamp duty as I didn't understand. However due to the pressure of everyone wanting to complete I carried on with it all.
What do I need to do as I can either pay it or dispute it as like dave I would have paid 900 to abode on top of the stamp duty of 1.5k if I pay it to hmrc. Double whammy.
What evidence have you put together dave? I have info via email about what the SDLT was about but I had signed the SDLT in which they had already filled in along with all the completion statements (which included 1.5k stamp duty), contracts etc. Do I need to contact stevensons solictors to see if I can get the £900 back? Is that right that they will charge £500 to take on the case and realistically can they really get hmrc to waive the stamp duty as I don't want to lose another £500.
Vin
The only thing I know for sure is that we will have to pay the SDLT to the HMRC. Whether we then get stung with penalties, interest is not yet known. Also there is a question around whether or not we can claim any of our losses back.
Have a read through my other thread..
http://www.pistonheads.com/xforums/topic.asp?h=0&a...
Edited by dave_s13 on Wednesday 7th May 18:39
Mr GrimNasty said:
Surely you know how much you paid to the conveyancer and what it was (supposed to be) for? If you were told to pay in full but to expect a refund, why didn't you query its non-appearance. You indicate you don't have a lot of spare cash - how could you lose track of £hundreds?
I didn't have 3 kids and a wife only just back on maternity back then....don't get me wrong, I'm not destitute. I just don't have thousands knocking about as back up.I'm still in the process of trying to track down what was paid, in which direction, and to whom. My plan of action is to 1st write to the HMRC explaining what has happened, await their response, then try and claim through the SRA. I'll look at the other avenues posted too re the law society and what not. All the while my intention is to drip feed payments back to HMRC every month to get it paid down.
I made a mistake by trusting someone to deliver the deliverable. If I can mitigate my losses to a degree then that's a bonus, You live and learn!!
I just hope Rajob Ali is pleased with himself.
http://www.yorkpress.co.uk/news/harrogate_ripon/10...
Edited by dave_s13 on Wednesday 7th May 20:23
ShortShift811 said:
Commiserations OP; not a nice position to find yourself in.
I would echo the advice of getting all your paperwork in order and having a robust response ready, including all mitigating circumstances and details of how the avoidance scheme was 'sold' to you.
You might find it useful to know that solicitors carry Professional Indemnity Insurance (for claims against them due to negligence) for this very reason. Even after they have closed down, the SRA insists they carry run-off PII for a period of 6 years, and the insurer is obliged to provide this even if the firm in question hasn't paid the premium.
There are specific pages explaining the insurance a Solicitors has to carry on both the SRA and Law Society websites.
It looks like a claim against the firm's PII might be your only recompense, even if you have to settle the HMRC bill in the first instance.
Usual caveat applies; I am not a lawyer etc. (I work in a related area and have seen similar circumstances before).
Hope you get the best possible resolution.
Thank you I would echo the advice of getting all your paperwork in order and having a robust response ready, including all mitigating circumstances and details of how the avoidance scheme was 'sold' to you.
You might find it useful to know that solicitors carry Professional Indemnity Insurance (for claims against them due to negligence) for this very reason. Even after they have closed down, the SRA insists they carry run-off PII for a period of 6 years, and the insurer is obliged to provide this even if the firm in question hasn't paid the premium.
There are specific pages explaining the insurance a Solicitors has to carry on both the SRA and Law Society websites.
It looks like a claim against the firm's PII might be your only recompense, even if you have to settle the HMRC bill in the first instance.
Usual caveat applies; I am not a lawyer etc. (I work in a related area and have seen similar circumstances before).
Hope you get the best possible resolution.
Db36 said:
Sorry to hear you are also having trouble.
The only thing I know for sure is that we will have to pay the SDLT to the HMRC. Whether we then get stung with penalties, interest is not yet known. Also there is a question around whether or not we can claim any of our losses back.
So are you paying it or appealing? What did stevensons say to you? Sorry so many questions. Guess I will be calling stevensons tomorrow to find out what to do. The penalty could be 1.5k plus interest and no idea how they work out interest.
Stevensons were little more than useless. Essentially she told me that the course of action they would take is to present my case to HMRC with hoping they would waive any due payments, no guarantee this would work. For this they wanted to charge £500. I told them I would think about it.The only thing I know for sure is that we will have to pay the SDLT to the HMRC. Whether we then get stung with penalties, interest is not yet known. Also there is a question around whether or not we can claim any of our losses back.
So are you paying it or appealing? What did stevensons say to you? Sorry so many questions. Guess I will be calling stevensons tomorrow to find out what to do. The penalty could be 1.5k plus interest and no idea how they work out interest.
The general consensus on here is that the above strategy is total b
ks, there is no way HMRC will just write this off. You/We are liable and you need to pay it off. I spoke to the repayment dept at HMRC to explain that I wasn't in a position to pay it all off in one go and to ask what my options were. The chap explained there was no facility to set up a repayment plan as such but his advice was to pay off regular amounts at regular intervals and this would be taken as a positive action by the recovery dept who may see it is being paid down and take no further action.with regard to interest accrued and penalties: I spoke to the officer who sent my letter and he indicated that penalties may be waived based on assessment of the circumstance, he wouldn't comment on the interest. I believe interest is 3% apr so it's not astronomical fortunately. The stage I'm at now is I've drafted a letter to HMRC explaining the situation and stressing that we acted in good faith etc. Included all invoices/emails/completion statements relating to the transactions (thank the lord baby jesus I archived these in my works email) and the plan is to wait for their response. Next step is to claim back any losses via SRA, you can download a claim form from their website.
Unlucky anyway mate. If you find out anything useful then please let me know, same applies your way, I'll help you out if I can. PM me if you like.
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