Temporary changes to stamping stock transfer documents - and a chance for permanent upgrades

Notwithstanding the general impact of COVID-19, there has been no relaxation of the rules requiring stamp duty payable on the transfer of shares from being paid within 30 days of the instrument being executed.  Filing late may attract penalties from HMRC (depending upon the duty payable and the length of the delay), and it is not clear whether the circumstances of COVID-19 will merit a general reason for cancelling such penalties, or if these would be assessed on a case by case basis.  

Given this uncertainty, it would be advisable for stamp duty to be paid, and stock transfer instruments submitted, without delay.   However, the current method for filing forms and making payment has changed, and it is important that the new practices are followed to avoid delays and penalties accruing.

Due to the COVID-19 lockdown, HMRC have recently announced that they will, on a temporary basis, no longer be processing hard copies of stock transfer forms for stamping.  In addition, at such time as they do begin processing physical copies, there is expected to be a delay due to the backlog.

As a temporary measure, HMRC are instead accepting payment of stamp duty by bank transfer, and will 'stamp' an electronic version of the stock transfer instrument.  Payment must be made first, and the electronic version of the stock transfer form will then be processed within 20 working days (with 80% of cases being dealt within 15 working days).  This timeframe represents a quicker turnaround than many physical copies were being actioned prior to the lockdown. 

For those seeking a refund for overpaid stamp duty, it was announced on 29 April 2020 that this would only be processed electronically, so bank details must be provided to HMRC with the application for repayment.

It is to be hoped that this provides an opportunity for HMRC to assess electronic stamping and payment generally, and that this may be retained or rolled out as an option post-lockdown.  There are many advantages of electronic filing, such as eradicating the delays inherent with collecting and posting original documents, and this would open the door to allowing same-day payment and stamping of documents, which would be a boon for transactions where the timing of transfers is critical.