The problem of unpaid stamp duty on tenancies has extended to councils.
The resurrection of the 1891 Stamp Act has already hit housing associations for a total of around £2m (HT 20 June 2002, page 10). Now, Camden council in north London estimates the issue will cost it £50,000 a year.

The Local Government Association is considering the issue with a view to working with the National Housing Federation and Inland Revenue, which are currently negotiating over the problem.

A source close to negotiations said: “If the LGA joined the effort, this would have a strong galvanising effect on proceedings.”

Camden became aware of the stamp duty issue in early summer last year when it was summoned to a meeting with Central London County Court to outline the requirement on housing bodies to pay stamp duty on tenancy agreements.

Gerri Scott, Camden’s assistant director of housing, said the council now has a procedure for tackling the problem, but that this was time-consuming because all tenancy agreements have to be taken in person to the Inland Revenue to be stamped.

Meanwhile, there has been no further movement on a proposed legal challenge to the Inland Revenue. An NHF spokesman said the preferred option was to press for recognition of the situation in a finance bill. This would allow housing associations and councils to be exempted “retrospectively” from the payment of stamp duty.

Source

Housing Today