Industry first technology launches to help solicitors and conveyancers protect themselves and their clients - an alarming number of SDLT calculations are wrong
SDLT Compass ground breaking-technology launches to protect firms from costly errors, making SDLT simple again Potential claims for SDLT errors could cause a professional indemnity crisis - with premiums rising up to 30% in 2021
Launch: On the 4th May, an industry reforming technology is being launched for the legal profession, protecting property lawyers and conveyancers against an ongoing professional indemnity crisis surrounding SDLT. Evolving at speed across the nation, residential conveyancing remains the area of practice where most insurance notifications are received, with residential and commercial cases combining to represent a near 51% of all incoming matters. Market commentary indicates that across the industry, many law firms are facing an increase of 20%-30% on annual PI premiums, driving down the incentive to generate new business and posing a viable threat to the future of many firms.
Each year, an estimated £2 billion of SDLT is overpaid to HMRC due to the complicated and often confusing nature of the tax. In the last year, just one of many stamp duty advisory firms alone has successfully recovered over £14m on behalf of its clients, the majority of which are individuals incorrectly paying thousands of pounds of unnecessary tax.
One of the main areas of concern relates to missed Multiple Dwellings Relief - with many clients claims against firms springing up in the past twelve months. A major reason that many calculations result in mistakes, is due to HMRC's own 'SDLT Calculator' lacking many of the nuances necessary to deal with a whole variety of UK property transactions - from mixed-use purchases, to acquisitions of land for development.
There are now 49 different reliefs, many of which are little known, making it very challenging for property professionals to calculate the correct rate of SDLT for each transaction. These errors often cost clients thousands of pounds each time and, if discovered after HMRC's four year period for reclaims, they can lead to solicitors and conveyancers facing significant potential negligence headaches, including ever-rising PI premiums.
This has led to predictions that premiums could rise by as much as 30% this year as insurers ask for more information up-front.
In order to provide solicitors and conveyancers with a simple way to ensure SDLT calculations are correct, SDLT Compass software application has been developed in partnership with several leading SDLT specialists.
It offers a one stop application that produces accurate SDLT calculations and screens for exemptions for all client transactions.
The application also provides a detailed audit trail to the specifications mandated in the latest CQS and Law Society tax guidance.
To find out more about Compass and some of the issues that it deals with you can visit the website here: https://sdltcompass.co.uk/learn-more/
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