Homebuyers hit by shock SDLT bills Hundreds of homeowners are being forced to stump up thousands of pounds on additional stamp duty bills after falling victim to irregularities in conveyancing. HM Revenue & Customs has contacted households where it has found discrepancies in the amount of stamp duty land tax (SDLT) paid compared with the purchase price of the property. The irregularities relate to a number of solicitors and conveyancing firms, with some cases concerning house purchases made more than three years ago. HMRC has told homeowners they must pay the stamp duty owed, as well as interest on the amount, despite them being able to prove they paid the correct amount of tax to their solicitor or conveyancer at the time of the purchase. In many cases, the solicitors failed to remit the correct amount of stamp duty because they entered a lower value for the house in the tax return. But as it is the legal responsibility of homebuyers to fill in and sign the SDLT return, HMRC is entitled to seek the unpaid tax from them, rather than the solicitor. HMRC confirmed it had uncovered cases where incorrect stamp duty returns had been filed. "We contact people if we find a discrepancy between the tax that we think should have been paid on a house purchase and what has in fact been paid," said a spokesperson for HMRC. We understand this would come as a shock because the purchaser would naturally expect the money to be sent to HMRC by their solicitor. A number of the cases are believed to relate to Cheshire-based law firm Wolstenholmes, which was shut down by the Solicitors Regulation Authority (SRA) in December 2009. Sarah Higgins, a former client of the law firm, was contacted in December by HMRC and asked to pay nearly £10,000 of unpaid stamp duty and interest for a house she bought in July 2009. She discovered that Wolstenholmes, which acted for her in the purchase, had entered the price of her property on the stamp duty return as £126,000 lower than the real amount. The whole thing is thoroughly shocking. I've now got to find £10,000 from somewhere," said Higgins. For people who are struggling financially this could be a serious sleep-loser to have to find this amount of money. Higgins is in the process of claiming her money back through the legal ombudsman. Other homeowners have posted similar complaints on consumer forums about Wolstenholmes. One homeowner questioned: "Who do you ask to protect you if you can't trust your solicitor?" Charles Hutton, a partner at City law firm Speechly Bircham, said the development was extremely worrying. "The whole system depends on the correct amount of tax being paid to HMRC by solicitors," he said. Martin Jones of Hugh James Solicitors said homeowners have to carry the can if the wrong stamp duty is paid. "HMRC has the power to say to them: "Look I'm sorry, but it's your responsibility to make sure that we have the correct return, the correct purchase price is put down and the right amount is paid."" The SRA, which regulates solicitors in England and Wales, said it co-operates with HMRC and the police where there are allegations of fraud involving solicitors. A spokesman for Greater Manchester Police said there are currently no criminal proceedings outstanding against former employees of Wolstenholmes. Howeve, five of Wolstenholmes" solicitors face a seven-day substantive hearing by the Solicitors Disciplinary Tribunal on Tuesday. The former partners and members of Wolstenholmes who are facing the hearing declined to comment. The SRA can issue fines of up to £2,000 itself, but for particularly serious cases it can make referrals to the SDT, which has the power to ban solicitors or impose unlimited fines. The SRA has already paid £12.3m out of the industry's compensation fund for claims relating to Wolstenholmes. Homeowners affected by erroneous stamp duty returns have been advised by HMRC to contact the SRA to seek compensation for the money that should have been paid. HMRC said that it will work closely with any purchaser in these circumstances, allowing them to repay the amount in monthly instalments.