Stamp Duty, – solicitors have messed up

Name and shame, check their invoice, but you have to pay up.

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

Possibly the most amusing question in the history of legal enquiry.

Unless the OP’s mother would not have bought a house at all if she had known the true cost of the SDLT it is unclear what she has lost.

BigDummy – Member
Are you suggesting that ignorance of the law is an alibi?
Possibly the most amusing question in the history of legal enquiry.

+1 🙂

Dickyboy that was in essence my fear but from the ops post i decided not likely.

you have to wonder sometimes.. the tax is due, sure the solicitor was in error about the amount but its still due that she continued with the transaction so your mum could move in by paying with thier own cash seems more than fair.

that STWbarrackroomlawyers feel mum should be due compensashun and staged payments is exactly why all proffessional fees are on the increase. your old mum looked around for the best value solicitor they made a genuine error in her tax liability if you pay someone 500 quid to deal with over a quarter of a million on your behalf stuff goes wrong..

your old mum looked around for the best value solicitor

Do you know this? Perhaps she went for the most expensive one thinking they were better, or one recommended to her. I haven’t seen anything to suggest she went to the cheapest (unless I have missed something of course).

totalshell – Solicitors are a regulated professional body. They are required to perform to a certain standard.

What would of happened if the mistake had been in the other direction and the OP’s mother hadn’t noticed?

that STWbarrackroomlawyers feel mum should be due compensashun and staged payments is exactly why all proffessional fees are on the increase.

Why shouldn’t they offer compensation?

They charge a hourly rate which should reflect the standard of their services. They have absolutely failed to provide the service they were contracted to provide. House sales and purchase are very stressful when they go smoothly, never mind getting a bill for several thousand pounds a few weeks after completion.

So professional negligence is OK if your rates are cheap?

I think it goes back to what someone said above about verifying her genuine loss. Probably nothing as she would have bought the house anyway and the asset has not lost any value due to the negligence.

totalshell – Member

you have to wonder sometimes.. the tax is due, sure the solicitor was in error about the amount but its still due that she continued with the transaction so your mum could move in by paying with thier own cash seems more than fair.

that STWbarrackroomlawyers feel mum should be due compensashun and staged payments is exactly why all proffessional fees are on the increase. your old mum looked around for the best value solicitor they made a genuine error in her tax liability if you pay someone 500 quid to deal with over a quarter of a million on your behalf stuff goes wrong..

There isn’t a chance in hell the solicitor would have continued with the transaction if they had realised their mistake prior to completion, they’d have stopped immediately.

If I pay a professional to do a job, I expect them to do it. If they get it wrong then I expect them to sort it.

£5k is the difference between stamp duty on a house going from £249,999 and £250,000 so it seems obvious that that either the price was £250,000 and the solicitor forgot the stamp duty threshold amd to suggest reducing it by a pound to save £5k(unthinkable) or they got the tea lady to do the contract.

The only way I can conceive that this could take place is if the someone had worked it all out on 249,999 to avoid the threshold and then someone rounded the numbers up without noticing, bumping it into the 3%. I can’t imagine there’s any other way this situation could manifest itself.

Whatever happened, if it’s their mistake, it’s their cost. Suck it up.

Speeder, you’re wrong. The limit is £250,000.00 for 1%

£250,000.01 invokes the next stamp duty level i.e. 3%

Of course, the question becomes whether the OP’s mum would have paid that price for the house if she had been correctly advised of the resulting impact on stamp duty payable, which could well bring it into the area of professional negligence rather than just a simple billing error.

perhaps a useful bargaining chip in the discussion…

Speeder – it’s anything over 250k. Not inclusive of 250k on the dot.

Stamp Duty rates are:
£0 to £125,000 – 0%
£125,001 to £250,000 – 1%
£250,001 to £500,000 – 3%
£500,001 to £1,000,000 – 4%
from Gov.uk

If the purchase price was £250,000 then the Stamp duty due is £2500.00
If the purchase price was £250,001 then the Stamp Duty due is £7500.03

If it was due (i.e their calculations are correct), just pay it to the solicitor and live with a clear conscience.
I personally do not know anyone who does not make a mistake occasionally.

OP, don’t think you’ve posted it but putting the purchase price up would be useful for anyone helping (unless your not comfortable with this). Presume if difference is 5k then it can’t be far over £250k anyway.

Alternatively use the SDLT calculator if you want to keep the purchase price private. The difference in SDLT for a house at £250k and just above £250k is £5k.

As already said above, this begs the question of whether the OP’s mum would have paid that price for the house if she had been correctly advised in the first instance of the resulting impact on stamp duty payable.

So i was a pound out – the argument still stands that the error lies with the solicitor and they should suck it up.

No-one sells a house for between 250000 and 275000 for exactly this reason and I find it inconceivable that this could be a “mistake”.

We just sold ours for £265k…

Surely when you bid for a house that is done between you and the seller , normally through the estate agent . When you have an accepted bid you then instruct solicitors to act on your behalf . You then have a form to fill in which includes purchase price . While it would have been nice of the solicitor to have informed you that a slightly lower bid would have saved £5000 I don’t think they have a legal duty to do so .

Speeder – Member

the error lies with the solicitor and they should suck it up.

So you’re saying that if a third party makes a mistake over who owes who £5k they should foot the difference?

Prepared to die by the sword on that statement?

If I screwed up on a job, I wouldn’t expect my client to pay .

would this not be covered under their professional indemnity insurance?

sorry all, been away from this for a few days…

so, the solicitors, it’s complicated. it’s a family firm, husband and wife, with a woman doing part time freelance work for them, the part time woman did this sale. They were recommended, but (and this is what raised my suspicions) the wife has died, and the husband is closing the firm. I thought the woman may be pulling a fast one…

house was circa 280k. they’ve paid 1%, and had 5700 to pay after the cock up, but the solicitor has taken the 700 quid off as a good will gesture, so they owe 5k.

I was round today, but a big lunch and a coup[e of bottles of wine meant I was was in no mood to look over their records and invoices. They are in contact with the firm owner…

Their cock up – their problem.
It’s not up to you when you instruct a solicitor to undertake something like this you are paying them for their expertise and knowledge.
Exactly the same as an accountant or similar – they do the sums, inform HMRC, etc so their issue.

Still LOLing at this, as if the solicitors now owe the SDLT!

Cynic-al – LOLing so much you haven’t read it properly?

The solicitors *paid* the stamp duty (they don’t owe it). But they are taking the piss asking for it back.

At the end of the day, the HMRC have their dough so they are happy so it comes down to an argument between a a client and a supplier.

It’s not whether they solicitors owe it or not – the solicitors are the ones responsible for informing you of the amount due in their professional capacity and paying it over as part of the contract.
They get the calculation wrong it is professional indemnity – the same as if I get it wrong with regards to advice/services to a client.
The fact they got the calculation right on one side and wrong on the other again – is THEIR fault.

Look guys I’ve been a solicitor and learnt at least this much:

No one bar the tax payer is due to pay their tax
Solicitors never pay anything they are not due!

PI insurance are you kidding me?

Well the solicitors have paid it haven’t they ?

Were you a better solicitor than you are a reader of English?

They have paid it…because they have a cast iron claim against the vendor.

The £700 discount is a good deal, take it.

So when did you see the estimates and invoices on this purchase cynic-al?

Same time you did?

From what I have read they solicitors screwed up and paid the SD now are trying to get it back.

You seem to think that a solicitor can screw up and ask for their money back.

If the money was still owed to HMRC you might have a point but it isn’t.

What’s the correct moral thing to do? I’d pay no question.

I am sure if your accountant makes a mistake on your tax bill he has to pay your tax for you same if your employer gets your paye wrong they have to pay your income tax for a year.

Professional indemnity insurance is for when someone has lost out as a result of negligence not for when they have gained a financial advantage by getting extra time to bay their tax .

The good will gesture is a good one.

Like the idea above that an officer of the court is negligent if they don’t fiddle the figures on a sale to help you defraud the tax man by 5 k.

Let’s see how it turns out John

I wouldn’t – you ask solicitor to do X, solicitor does X and says that will be £Y
Pay £Y and then solicitor comes back and says “oops we made a booboo… Can we have £Z?”
Errr NO! Should’ve checked before asking for £Y
If you issue an invoice against a price quoted then that stands legally – can’t change it without unilateral agreement.

The solicitor actually quotes x his fee plus y dispersments . His fee x has not changed the y is always variable as it is outside the solicitor’s controll . Are you seriously suggesting that if stamp duty was reduced after the quote and before completion the solicitor would get to keep the extra?

Some weird ethics on here! Or very muddy thinking.

Put it in a slightly different context….

You employ an accountant to do your tax return – they charge £1000 to do the work and initially work out the income tax you are due is £10K which you pay. A few days later they comes back to you cap in hand and say very sorry we ballsed up, the actual figure was £20K. We paid the extra out of our own pocket to make sure you made the 31st Jan deadline and could we have the extra £10K please. Because we have cocked up we’ll halve our fee and knock that off what you still owe so that’s £9.5K please.

You might be miffed that they cocked up but only a very odd person would think it right(morally or legally) not to pay the extra you owed back to the accountant. I see no difference in this conveyancing case.

Thinking about it this minor inconvenience has actually saved her £700 – happy days!