How to Appeal an SDLT Penalty

If you've been charged a penalty for filing your Stamp Duty Land Tax (SDLT) return late, you have the right to appeal if you believe you had a reasonable excuse. This article explains what qualifies as a reasonable excuse, how to submit an appeal, and what to expect from the appeals process.

Understanding SDLT Late Filing Penalties

HMRC issues penalties when you fail to submit your Land Transaction Return (form SDLT1) by the required deadline. The deadline is 14 days after the completion date of your property transaction. If you miss this deadline, you'll receive a penalty notice.

Before appealing, note that SDLT only applies to property transactions in England and Northern Ireland. If you purchased property in Scotland from 1 April 2015 onwards, you pay Land and Buildings Transaction Tax instead. If you purchased property in Wales from 1 April 2018 onwards, you pay Land Transaction Tax.

What Is a Reasonable Excuse?

The key to a successful appeal is demonstrating a "reasonable excuse" for missing the filing deadline. HMRC defines this as something unexpected or outside your control that prevented you from meeting the deadline.

Crucially, HMRC will only accept your excuse if what happened meant you couldn't:

File the return yourself, and
Arrange for someone else to file it on your behalf

You must also show that you did everything possible to file your return as soon as the circumstances allowed.

Examples of Acceptable Reasonable Excuses

HMRC may accept the following as reasonable excuses:

Postal problems: You posted your SDLT return with enough time for it to arrive before the deadline, but it was lost or delayed due to circumstances like floods or industrial action.

Your adviser's serious illness: Your tax adviser or solicitor became seriously ill and unable to manage their business or private affairs. This includes situations such as a heart attack or stroke that prevented them from fulfilling their professional duties.

Death of your adviser: If your adviser died and this directly prevented the timely filing of your return.

What Won't Count as a Reasonable Excuse

HMRC is clear about circumstances that don't constitute reasonable excuses. The following are unlikely to be accepted:

Difficulty completing the form: Finding the return too difficult to fill in doesn't qualify as a reasonable excuse.

Work pressure: Being too busy with other work commitments won't be accepted.

Payment delays: Waiting for your adviser to pay the SDLT on your behalf, or waiting to pay your adviser before they submit the return, is not a reasonable excuse.

Awaiting valuations: Waiting for a property valuation doesn't qualify. You should use your best estimate and amend the return later when you have the final valuation.

Seller's adviser delays: Problems caused by the seller's adviser or solicitor don't excuse your late filing.

Being abroad: Simply being abroad when you need to sign the return isn't accepted. If you plan to be away, you should arrange a power of attorney in advance.

HMRC also won't accept your excuse if what happened didn't prevent you from dealing with your other affairs. If you managed to handle other business or personal matters during the period in question, HMRC will question why you couldn't arrange for the SDLT return to be filed.

How to Submit Your Appeal

You have 30 days from the date on the penalty notice to submit your appeal. You can appeal in two ways:

1. Complete form SDLT46 (Notice of Appeal Against a Penalty)

2. Write a letter setting out your grounds for appeal

Whichever method you choose, clearly explain:

Why you missed the filing deadline
Why this constitutes a reasonable excuse
What steps you took to file as soon as possible once the problem was resolved

Send your appeal to:

HM Revenue and Customs

BT - Stamp Duty Land Tax

BX9 1HD

United Kingdom

Most appeals are resolved at this initial stage through agreement between HMRC and the taxpayer.

Pay the Penalty While Appealing

You must pay the penalty even while your appeal is being considered. This is a strict requirement.

If you don't pay the penalty and your appeal is unsuccessful, you'll be charged interest on the late payment of the penalty from the original due date.

If your appeal succeeds, HMRC will repay the penalty along with interest.

If HMRC Rejects Your Appeal

HMRC settles most appeals by agreement at the first stage. However, if HMRC doesn't accept your appeal and you still disagree with their decision, you have the right to take your case further through the tax tribunal system. This involves formally appealing against HMRC's decision through an independent tribunal.

Key Points to Remember

Act quickly: you only have 30 days from the penalty notice date to appeal
Your excuse must have prevented you from both filing yourself and arranging for someone else to file
Show that you filed as soon as possible once the problem was resolved
Pay the penalty even while appealing to avoid interest charges
Keep evidence that supports your reasonable excuse

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.