Stamp Duty, – solicitors have messed up

My mum has just bought a house, completed, moved in, paid all solicitors fees.

She got a call a few days ago, from the solicitor, saying the solicitors miscalculated the stamp duty, and my mum owes them 5k. The solicitors only calculated it at the lower rate, but as the house was over 240k, or whatever the threshold is, she has under charged them by 5k, and can she have it please?

Legally, where does my mum stand? The solicitor has paid the stamp duty in full out of her own pocket, after she realised the mistake.

Cheers

The stamp duty threshold for 3% is 250k,if she has bought a house for more than that then legally she has to pay up. Very basic mistake from the sols, bad mouth them to everyone you know.

Why does the legality matter? Is she trying to get out of paying what she owes?

No way to get out of this.

I think the OPs point is that the solicitor has made the error they should stand it. His mum paid what they asked for now they want more
Yes the duty must be paid, who pays is the question

Trying to rip off a solicitor is probably not going to end well.

Well firstly double check the calculation yourself. Your mum owes the money even if the solicitor made a mistake. House conveyancing now is very cheap, it’s not surprising more mistakes are being made as I cannot see the solicitors spending much time on each transaction.

[rant]
Stamp duty was originally introduced for high value homes but it’s been extended to cover most now. The way it works is robbery (as higher rates are payable on whole property price not just the amount over the threshold) and the higher rates 5% and 7% are some of the highest in the world.
Anyone who is advocating an annual “mansion tax” needs to understand sooner or later everyone will be paying it
[/rant]

Go to the ombudsmen raise a complaint, you might be able to negotiate a discount or staged payments. It’s a very basic error that shouldn’t of happened.

Discount on SDLT?

DREAM ON!

Go to the ombudsmen raise a complaint, you might be able to negotiate a discount or staged payments.

Stamp duty goes to the government and the solicitors are just the collectors, so good luck with trying to get a discount.
To be honest (and with the greatest respect) “your mum” has made a very basic mistake if she didn’t give full consideration to the stamp duty payable – it’s easier to work out than the cost of removals!
She has to pay I’m afraid – no choice.

According to the OP the correct stamp duty has been paid to the government so they won’t care, this is the solicitor trying to claim back the money back from her. Aruging the toss about a discount or staged payments might not be such a terrible idea. Having said that, she does owe the money and it was an honest mistake by the solicitor who has already gone a bit above an beyond by stumping up the the cash herself rather than saying, “opps you can’t have your knew house unless you pay me another £5k” so I’d say pay up.

thanks all,

my mum isn’t trying to get out of paying it, shes 70, and is just a little bit suspicious that’s all.

I agree i seems a very very basic mistake, that’s why I asked the question. To get a call, saying you owe us another 5k isn’t really on, IMO.

To get a call, saying you owe us another 5k isn’t really on, IMO.

The alternative was a solicitors letter. Phone call was pretty decent I say

If I was buying a house I’d know exactly how much I had to pay in stamp duty before I made the purchase – wouldn’t everyone do that?

Your mum must have noticed the stamp duty figure was lower than expected surely?

The fact its stamp duty seems irrelevant.

Its a billing error, same as if you’d been undercharged for electricity or another service. I’m pretty sure theres very little way of getting out of it but you might be able to negotiate a monthly payment.

Gary M, you don’t know my mum 🙂

cheers all, I’ll tell her STW has spoken, and she needs to write a cheque!

If it were me I would be trying to negotiate with the solicitor – it was their dreadful mistake. After all, as has been said, she paid what she was asked to pay.

And if a solicitor doesn’t even know the correct stamp duty rate (above £250,000 it is 3% BTW) then what else have they missed?

No idea where she stands legally though – but if she had a bill saying you owe Y and she paid it, then they say, no it’s Z, then I question whether or not they do have a leg to stand on. After all, if you bought something in a shop at the price agreed then they asked for more you’d tell them to jog on.

If they have messed up the calculation once, I would want to see the original calculation and the revised calculation with an explanation as to why the first one is incorrect and why the second one is correct before paying over any money. Especially for an amount running into the thousands…

This

If they have messed up the calculation once, I would want to see the original calculation and the revised calculation with an explanation as to why the first one is incorrect and why the second one is correct before paying over any money. Especially for an amount running into the thousands…

Stamp duty goes to the government and the solicitors are just the collectors, so good luck with trying to get a discount.

The stamp duty has been paid. HMRC does not give a shit.

The solicitors had been absolutely useless. They have made a billing mistake of several thousand pounds on a fundamental of a house purchase. Personally, I would consider that incompetence.
They should at least be willing to offer some form of compensation,or “discount”,for their mistake. at the very least I would expect the chance to make staged payments.

they do have both calculations, they’re briniging them round to mine tonight…

The solicitor has paid your mum’s tax bill for your mum rather than leave your mum to get chased by the government. They and your mum have clearly made an error re the stamp duty she owed for which your mum is less to blame than them.

I would double check their figures then ask for some repayment terms.

I did have a more worrying thought about this which does not seem applicable from your post. If you are not happy about the figures or payments made re stamp duty post again and I or no doubt someone else will venture an opinion.

Its not as if the solicitor has paid the full stamp duty ‘out of the goodness of their own heart’. They’d have paid it as part of the move, just like making sure the funds from the sale go to the relevant seller/mortgage provider etc. etc. so they won’t have done you a ‘favour’ by paying it.

Presumably someone with some mathematical skills has double checked the whole transation later on and found the error.

Bet they managed to calculate their own fees correctly….

Seems under control if they are bring the calcs to you. The money is owed assuming the numbers stack up but I’d be hinting that they could drop a bunch of flowers over for being so stoopid. To your mum, not you!

thanks all for your opinions and advice,

I’ll check the statements tonight and see what they say…

Cheers all

I’d seriously be concidering telling them to jog on (after legal advice :D).

She’ll have paperwork and invoices from them, all paid in full? Their cock up their problem. I work in the oil and gas industry quoting some fairly large and complex jobs, if I get it wrong then the company has to stand the loss, I make sure I don’t get it wrong.

I thought everyone knew you pay £249,999 every time?

Can you not go back and agree to change it to that even if you give them £1 for the curtains or something? Last time we dis this, you always paid the max you can for curtains, carpets, appliances etc just to lessen the property value

C

Can you not go back and agree to change it to that even if you give them £1 for the curtains or something? Last time we dis this, you always paid the max you can for curtains, carpets, appliances etc just to lessen the property value

Nothing like a bit of tax evasion. 🙂

Apportionments have to be fair and justifiable. Would you want to sign a tax return for a house at £250,000 with £20,000 curtains?

I have some sympathy for the solicitor – they will be dealing with SDLT day in day out at 1% and forgot that this one should be 3%. At the end of the day, it is a tax which is due by a purchaser so the OP’s mother needs to cough up and should have been aware of her tax liability before entering into the transaction.

The solicitor has paid the full tax so that the title can be registered, otherwise the purchaser (and the solicitor) would have been stuffed.

The honourable thing to do for the purchaser is to stump up the cash. If there is genuine hardship and the funds aren’t available, then I’d be asking the solicitor if they would mind instalments though. I can’t see them refusing that given their error.

pixelmix – Member
I have some sympathy for the solicitor – they will be dealing with SDLT day in day out at 1% and forgot that this one should be 3%. At the end of the day, it is a tax which is due by a purchaser so the OP’s mother needs to cough up and should have been aware of her tax liability before entering into the transaction.

The solicitor has paid the full tax so that the title can be registered, otherwise the purchaser (and the solicitor) would have been stuffed.

The honourable thing to do for the purchaser is to stump up the cash. If there is genuine hardship and the funds aren’t available, then I’d be asking the solicitor if they would mind instalments though. I can’t see them refusing that given their error.

I don’t, he’s (she?) been paid to supply a service, the customer shouldn’t then have to double check everything has been carried out correctly. Not everyone want’s to or is confident to sort it out themselves, I know my own Gran wouldn’t have been. Funnily enough that’s why you employ someone professionally qualified, solicitor should suck it up, tbh I’m amazed they had the gall to bring up such a basic error on their part.

As said above, bet they got their fee spot on.

The solicitor has paid your mum’s tax bill for your mum rather than leave your mum to get chased by the government

The only reason the solicitor paid the bill is they know they messed up big time and don’t wont to be sued themselves.

After all you can’t re-bill a client after they’ve paid what you said they owed you.

The whole reason you pay a solicitor is to get this right the first time. The responsibility is on them.

To be honest (and with the greatest respect) “your mum” has made a very basic mistake if she didn’t give full consideration to the stamp duty payable – it’s easier to work out than the cost of removals!

Do you keep a dog and bark yourself?

I can’t see why there is even a discussion on this. Stamp Duty isn’t exactly a new concept and she must have known that it would be due. If there is no doubt about the value for the house then that cost should have been taken into consideration during the purchase. This isn’t an unfair or hidden charge so there is no moral reason for her not to pay it. Why would she/you try to wriggle out of her responsibilities on account of someone elses mistake?

and she must have known that it would be due.

Err, and so should the solicitor. The solicitor has much more reason and responsibility to know about it and to be able to calculate it correctly.

And she knew she had paid Stamp Duty (at 1%) so perhaps she (quite legitimately) assumed she had paid what was due. After all, I know for a fact my wife didn’t know what rate and at what value it is charged at when we bought a house earlier this year. Had she trusted someone to do it for her, the same would have happened to her.

I thought everyone knew you pay £249,999 every time?

You can pay £250,000.00 and pay 1%, it’s only at £250,000.01 you pay 3%!

How much was your mum’s house OP – ‘calculations’ shouldn’t be needed. It’s fingers and toes maths!

I beg to differ. Are you suggesting that ignorance of the law is an alibi?

I beg to differ. Are you suggesting that ignorance of the law is an alibi?

To a large extent, yes. She paid someone to complete the purchase on her behalf. That person made a cock-up.

If you sent your car to the garage to fix a puncture then the wheel fell off on the way home, who would be at fault? You for not checking the wheel nuts had been tightened or the garage for not doing their job correctly – albeit an error rather than deliberate.

Ask them to confirm in writing what is required and why.
If you’re not happy then follow up by writing to them formally to complain – on the basis that you engaged them to conduct a professional service and their final settlement statement was incorrect.

I knew someone that a similar thing happened to (although there was a greater degree of incompetence) and a partial fee reduction and a repayment plan was agreed. The solicitor will be aware that taking the buyer/client to court for the money could result in a repayment plan in any case, so it should be a pragmatic solution to agree something without resorting to this. Clearly the solicitor will be out-of-pocket for a period, but that may encourage them to apply better quality control to what they do in future.

If they get funny about it then just ask about their complaint escalation process (which should eventually lead to the ombudsman).

Are you suggesting that ignorance of the law is an alibi?

And I should add – it isn’t clear that she was ignorant of the law, rather that she trusted the solicitor to do the calculations correctly (and subsequently pay on her behalf) in order to complete the purchase.

To the OP, has everything else they’ve regards this sale been checked?
We don’t want you your mother caught out again
It sounds like they got their coveyancing qualifications from a christmas cracker.
Name and shame

Not this lot I hope…

http://www.bbc.co.uk/news/uk-england-essex-25428757