(Draft) Explanatory memorandum
Published 24 June 2022
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This publication is available at https://www.gov.uk/government/consultations/draft-legislation-the-stamp-duty-land-tax-service-of-documents-regulations-2022/draft-explanatory-memorandum
1. Introduction
1.1. This explanatory memorandum has been prepared by Her Majesty’s Revenue and Customs (HMRC) and is laid before the House of Commons by Command of Her Majesty.
2. Purpose of the instrument
2.1. The Stamp Duty Land Tax (SDLT) legislation provides that documents or notices sent by HMRC to a company may be served by post at the company’s usual address. In some cases, this may differ from the registered address of the company or the address provided when completing a land transaction return.
2.2. This instrument will prescribe the company’s registered office and the purchaser’s address provided to HMRC on the company’s land transaction return as places to which HMRC may deliver and serve documents or notices under the deemed service provisions contained in the Interpretation Act 1978.
3. Matters of special interest to Parliament
Matters of special interest to the Select Committee on Statutory Instruments
3.1. None.
4. Extent and territorial application
4.1. The territorial extent of this instrument is the United Kingdom.
4.2. The territorial application of this instrument is the United Kingdom.
5. European Convention on Human Rights
5.1. As the instrument is subject to negative resolution procedure and does not amend primary legislation, no statement is required.
6. Legislative context
6.1. In the context of SDLT, section 7 Interpretation Act 1978 allows HMRC to rely on deemed service where a document or notice is served on or delivered to a company at the company’s principal place of business. Deemed service is where a document or notice is legally treated as having been served on a person, unless it is proved otherwise.
6.2. This instrument introduces the registered address and the purchaser’s address contained within the land transaction return as places of service of documents and notices in addition to the principal place of business which is already prescribed in legislation.
7. Policy background
What is being done and why?
7.1. Where a company has undertaken a land transaction and completed an SDLT return, in some cases, the address contained within the return may differ from the company’s principal place of business or the registered address.
7.2. The current provisions allow HMRC to legitimately serve or deliver notices to a company at those locations. However, as the deemed service provisions under section 7 Interpretation Act 1978 specifically apply to a company’s principal place of business, where a document or notice is sent to a different address, such as the registered address or the address a company provides within the land transaction return, HMRC may be unable to rely on deemed service in relation to those places. This has created a gap in the legislation.
7.3. In order to address this gap, specifying the delivery of documents or notices to those locations not currently specified would provide HMRC with additional operational flexibility.
7.4. This instrument prescribes the registered office and the purchaser’s address provided to HMRC on the SDLT return as additional places to which deemed service may apply, in addition to the principal place of business.
8. European Union withdrawal and future relationship
8.1. This instrument does not relate to withdrawal from the European Union.
9. Consolidation
9.1. No consolidation is planned in respect of this measure.
10. Consultation outcome
10.1. A draft statutory instrument was published on 24 June 2022 for comment by 22 July 2022. [The results of the consultation on the draft instrument will be inserted]
11. Guidance
11.1. No guidance is required as companies will not be expected to do anything differently compared to what they do now.
12. Impact
12.1. There is no impact on business, charities or voluntary bodies.
12.2. There is no impact on the public sector.
12.3. [A tax information and impact note (TIIN) covering this instrument was published on 24 June 2022 alongside the consultation draft of this instrument. It remains an accurate summary of the impacts that apply to this instrument.]
13. Regulating small business
13.1. The legislation does not apply to activities that are undertaken by small businesses.
14. Monitoring and review
14.1. HMRC will monitor this measure on a continual basis through the information collected on land transaction returns.
14.2. The instrument does not include a statutory review clause under the Small Business, Enterprise and Employment Act 2015 as it is a tax related measure.
15. Contact
15.1. Please contact Dupe Ogunmuyiwa at HMRC with any queries regarding the instrument.
15.2. Morris Graham, Deputy Director for Stamps Taxes, at HMRC can confirm that this explanatory memorandum meets the required standard.
15.3. The Rt Hon Lucy Frazer QC MP, the Financial Secretary to the Treasury, can confirm that this explanatory memorandum meets the required standard.