HMRC has updated its guidance to set out temporary changes to the stamping process.
This is in response to recent measures put in place to stop the spread of Covid-19, which mean that it is not currently possible to physically stamp documents or accept payment by cheque.
The temporary process
Taxpayers must now pay any stamp duty due electronically using Faster Payment, BACS or CHAPS and then email an electronic copy (e.g. a scanned PDF) of the stampable instrument and any supporting documents to HMRC at stampdutymailbox@hmrc.gov.uk.
Any instruments already posted should be resubmitted electronically. They will otherwise not be stamped until the temporary Covid-19 measures end. Similarly, cheques will not be banked until that time, so payment should be made again electronically (and the cheque cancelled to avoid the risk of double payment).
Instruments must still be fully completed, signed and dated (using a power of attorney if necessary) and the 30 day deadline for paying stamp duty and presenting the instrument of transfer for stamping remains the same. HMRC has, however, confirmed that it will accept electronic signatures while Covid-19 measures are in place, which is a welcome relaxation given the current difficulties in obtaining ‘wet ink’ signatures.
Although not expressly covered in HMRC’s updated guidance, instruments will also need to be submitted electronically where the ‘wait and see’ process applies, whether for initial stamping or final stamping. For final stamping applications, this will be the case regardless of whether HMRC has previously retained the original instrument pending final determination of the consideration or returned it provisionally stamped. Where the consideration is finally determined after the Covid-19 measures have ended, instruments submitted electronically for initial stamping during this period will likely need to be submitted by post for final stamping.
Taxpayers should contact HMRC (using the email address above) if they cannot get a stock transfer form or instrument of transfer signed and dated, or if they are unable to make an electronic payment.
HMRC’s response
HMRC will not acknowledge receipt of each individual notification. Once the documents have been checked, HMRC will issue a letter (sent by email) confirming receipt of the stamp duty payment and providing assurance that HMRC will not pursue a penalty against the registrar for registering the new ownership of the shares.
HMRC says that it aims to deal with 80% of applications within 15 working days (although it suggests taxpayers should allow 20). Once received, the confirmation letter should be provided to the registrar of the company along with the stock transfer form and the share certificate. The letter should be kept with the relevant instrument as evidence of payment of stamp duty.
HMRC’s expectation seems to be that these measures should provide sufficient comfort to registrars and taxpayers. However, HMRC does not confirm that an instrument processed in accordance with their revised guidance will be treated as ‘duly stamped’, as required by several provisions of the Stamp Act 1891. As a technical matter, it therefore remains an offence for a registrar to register the transfer (regardless of HMRC’s confirmation that it will not enforce the £300 penalty) and, absent legislative changes, the instrument could not be relied upon in court unless subsequently stamped.
Other applications
Other applications, including claims for relief and applications for confirmation that the court order sanctioning a scheme of arrangement will not be subject to stamp duty, should also be submitted electronically, along with electronic versions of the relevant documents. For relief claims, HMRC has announced that to minimise file sizes it will temporarily only require a list of shareholders and the shares they hold rather than full copies of registers of members.
As regards own share purchases, Companies House has confirmed that it will accept and register an unstamped SH03 form if it is accompanied by a letter from HMRC confirming that the correct duty has been paid.
HMRC has updated its guidance to set out temporary changes to the stamping process.
This is in response to recent measures put in place to stop the spread of Covid-19, which mean that it is not currently possible to physically stamp documents or accept payment by cheque.
The temporary process
Taxpayers must now pay any stamp duty due electronically using Faster Payment, BACS or CHAPS and then email an electronic copy (e.g. a scanned PDF) of the stampable instrument and any supporting documents to HMRC at stampdutymailbox@hmrc.gov.uk.
Any instruments already posted should be resubmitted electronically. They will otherwise not be stamped until the temporary Covid-19 measures end. Similarly, cheques will not be banked until that time, so payment should be made again electronically (and the cheque cancelled to avoid the risk of double payment).
Instruments must still be fully completed, signed and dated (using a power of attorney if necessary) and the 30 day deadline for paying stamp duty and presenting the instrument of transfer for stamping remains the same. HMRC has, however, confirmed that it will accept electronic signatures while Covid-19 measures are in place, which is a welcome relaxation given the current difficulties in obtaining ‘wet ink’ signatures.
Although not expressly covered in HMRC’s updated guidance, instruments will also need to be submitted electronically where the ‘wait and see’ process applies, whether for initial stamping or final stamping. For final stamping applications, this will be the case regardless of whether HMRC has previously retained the original instrument pending final determination of the consideration or returned it provisionally stamped. Where the consideration is finally determined after the Covid-19 measures have ended, instruments submitted electronically for initial stamping during this period will likely need to be submitted by post for final stamping.
Taxpayers should contact HMRC (using the email address above) if they cannot get a stock transfer form or instrument of transfer signed and dated, or if they are unable to make an electronic payment.
HMRC’s response
HMRC will not acknowledge receipt of each individual notification. Once the documents have been checked, HMRC will issue a letter (sent by email) confirming receipt of the stamp duty payment and providing assurance that HMRC will not pursue a penalty against the registrar for registering the new ownership of the shares.
HMRC says that it aims to deal with 80% of applications within 15 working days (although it suggests taxpayers should allow 20). Once received, the confirmation letter should be provided to the registrar of the company along with the stock transfer form and the share certificate. The letter should be kept with the relevant instrument as evidence of payment of stamp duty.
HMRC’s expectation seems to be that these measures should provide sufficient comfort to registrars and taxpayers. However, HMRC does not confirm that an instrument processed in accordance with their revised guidance will be treated as ‘duly stamped’, as required by several provisions of the Stamp Act 1891. As a technical matter, it therefore remains an offence for a registrar to register the transfer (regardless of HMRC’s confirmation that it will not enforce the £300 penalty) and, absent legislative changes, the instrument could not be relied upon in court unless subsequently stamped.
Other applications
Other applications, including claims for relief and applications for confirmation that the court order sanctioning a scheme of arrangement will not be subject to stamp duty, should also be submitted electronically, along with electronic versions of the relevant documents. For relief claims, HMRC has announced that to minimise file sizes it will temporarily only require a list of shareholders and the shares they hold rather than full copies of registers of members.
As regards own share purchases, Companies House has confirmed that it will accept and register an unstamped SH03 form if it is accompanied by a letter from HMRC confirming that the correct duty has been paid.
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