Homeowners sued by tax authorities over surprise stamp duty bills

Homebuyers have been sued by the IRS and threatened with debt collection because the country’s largest transfer agent failed to pay its stamp duty on time.

Simplify Group customers have received letters from HM Revenue & Customs demanding payment of unpaid tax for purchases made months ago.

Carriers typically pay the stamp duty bill on the day of completion, using funds transferred in advance by the buyer. Tax is due no later than two weeks after purchase. But Simplify customers have been left in limbo after the company missed deadlines.

Stephen Parsons* made a purchase in the East Midlands in December and assumed his £3,500 stamp duty bill had been settled as promised by Premier Property Lawyers, a subsidiary of Simplify. He said: ‘I was somewhat alarmed to move into the house in early January to find a letter from HMRC demanding stamp duty.

Payment up to three months late results in a fine of £100, which then increases to £200. Interest is due on the tax invoice from the day after the missed deadline and is charged at 3 pc.

Mr Parsons sued his transfer agent but received two further letters from HMRC warning that the tax bill had not yet been paid. The latest letter, which arrived in February, warned that the matter had been referred to debt collectors.

“The tax is paid now, but it was stressful to get there. The worst thing is that the carriers didn’t even tell us that they hadn’t paid for it,” he added.

This is the latest in a series of failures at Simplify. In November, it was hit by a cyber outage that halted trading and completions and put thousands of home sales in limbo.

However, the trouble started long before that. Clients have previously told Telegraph Money of spending months seeking out lawyers for a deal update, only to be ignored, given false promises or failed sales.

After months of waiting, customers have now received final invoices from the company asking for thousands of pounds more than originally expected.

A Simplify customer, who wished to remain anonymous, was given an initial estimate of around £900 to cover transfer costs. But the final bill she received was over £4,000.

A company spokesperson said: “At the start of the [cyber outage] incident, there were delays to payments and transactions as we found solutions to restore our systems safely and get customers moving.

“The delay included some stamp duty payments. All cash held by Simplify is in an entirely separate system and was unaffected by the incident.

He added: “Stamp duty payments are now being processed as normal, but if any of our customers or partners have received a query from HMRC regarding a payment, they should contact us immediately.”

A Simplify spokesperson said the company also itemized all “known charges” and “any potentially additional charges” in initial quotes to customers. The firm said that “where additional charges are to be applied for specific work, these are notified to the client”.

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