HMRC: More guidance coming soon
Conveyancers have complained about a lack of clarity on the requirement to register as tax advisers with HM Revenue & Customs (HMRC), which comes into force in two months’ time.
A joint statement from the Society of Licensed Conveyancers (SLC) and the Bold Legal Group (BLG) highlighted confusion in particular over whether outsourcing could be a way to avoid registration.
A statement from HMRC to Legal Futures indicates that being paid by the client for the tax work will be a crucial factor.
The requirement to register covers the submission of stamp duty land tax (SDLT) returns by conveyancers, as this is defined as tax advice.
HMRC guidance issued last month stressed that business had to register even if “you do not view yourself as a tax adviser, or describe your work as tax advice” and “helping people with their tax affairs is not your main business function”.
A failure to register could lead to a formal notice to stop providing tax advice and a temporary or permanent ban from being able to register.
The requirement will come into force on 18 May and advisers will have three months to apply to register.
The statement said the SLC and BLG have received a large volume of queries from firms who believed that outsourcing SDLT work would remove the obligation to register.
HMRC has so far ignored “repeated requests for clarification”, but they did not currently agree with this view.
“Even if SDLT work is outsourced, many firms still handle the payment to HMRC – which may continue to be treated as tax adviser activity under the new rules.
“If the outsourced provider submits the payment instead, this presents its own risks, and it remains unclear whether such providers are themselves required to be or are already registered as tax advisers, and whether using them would exempt the instructing firm from registration.”
The statement added that the outsourced provider would typically act as the conveyancer’s agent, “meaning you remain the principal and may still be held liable for any errors or defaults”.
The two groups said any decision to outsource should also take into account the best interests of clients, the need to comply with the requirements of lenders and, for those covered by the Conveyancing Quality Scheme, its requirements too.
An HMRC spokeswoman said: “All tax advisers who interact with HMRC on behalf of clients and get paid for it will be required to register. This includes conveyancers who submit SDLT returns.
“We will be publishing more detailed guidance shortly which will give clarity to businesses and support them with the registration process.”
Another question was the UK Finance Lenders Handbook, with the SLC and BLG interpreting it as saying that conveyancers acting for mortgage lenders would need to register as tax advisors.
“We are seeking clarification from UK Finance that this is the position,” the statement said.
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