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Chaotic stamp duty system means HMRC refunds £10m each month

HMRC has refunded £185m to some 15,000 house buyers since the introduction of the stamp duty surc...

HMRC has refunded £185m to some 15,000 house buyers since the introduction of the stamp duty surcharge in April of last year according to new research by Which?.

The consumer organisation's analysis also reveals that some £10m a month is on average being refunded to buyers who have unwittingly fallen foul of the duty system.

The body has not formally asked the government to reform the system but the analysis adds weight to the growing calls for stamp duty to be simplified and, in some parts, even scrapped at the Budget to be presented by Chancellor Phillip Hammond on November 22.

It says buyers who have to temporarily own two homes because they are unable to synchronise the sale of one property with the purchase of another are, of course, entitled to get their money back within three years.

"But the lack of a grace period between buying and selling properties means some movers are shelling out thousands more up-front than they might have expected" it says.

Meanwhile the London Chamber of Commerce and Industry has called for reform of the duty in the Budget.

LCCi says the reformed system which reduced the amount of stamp duty paid on 98 per cent of homes, while welcomed by many throughout the country, disproportionately impacts London given the profile of property in the capital.

Chief Executive of LCCI, Colin Stanbridge says: “There have been various reports of the top end of the London property market slowing down – and the reason behind that need to be examined. The reforms of late 2014 were introduced in a very different political and economic landscape. Since then we have had two General Elections and, most crucially, the decision to leave the EU."

He says the Treasury is well aware that top end housing activity delivers more than just tax – there are numerous associated benefits to the wider economy with the services of lawyers, surveyors, designers and builders all experiencing significant business.

"If the top end of the housing slows then a corresponding reduction in such business and commerce may result.  The Chancellor should use the opportunity of the Budget to commission [a study] of the impact of Stamp Duty on London’s property market and the wider economy of the capital”.

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