MDR HMRC Investigations

Have you claimed Multiple Dwellings Relief and is your case now being investigated by HMRC?

The ability to claim Multiple Dwellings Relief (MDR) for many homeowners provides a means by which Stamp Duty on property purchases can be significantly reduced where an annexe exists. Typically, around 25,000 properties change hands every year where the property being sold contains an annexe. If the conveyancer fails to claim MDR when conducting the purchase all is not lost: in the first 12 months after completion of the purchase MDR can be recovered from HMRC. However, after 12 months the only recourse may be a claim against the conveyancer.

The key issue is of course to determine which properties have a genuine claim for MDR and which ones don’t.

We are aware that HMRC are now reviewing many claims for MDR. HMRC has notified many owners that their property did not qualify for MDR although MDR was claimed. In addition to repaying the original monies refunded home owners are being fined and charged interest on the monies wrongly claimed. If your MDR claim is now being overturned by HMRC then please call us today for advice as we may be able to assist you.

Why has HMRC investigated cases where MDR has been refunded?

We are aware that some of the “cold callers” have been targeting Estate Agents’ websites and specifically looking for properties where potentially an annexe exists. The problem is that the term “potentially” means that whilst some properties will have genuine claims, some others won’t. In some cases, a few rogue CMCs are suspected of encouraging home owners to pursue claims that could end in financial disaster. HMRC appear to have taken the stance to have paid out on most MDR claims, and then reserved the right to investigate the remaining cases in the following 3 years.

Quite often we have received calls from members of the public that have received a mailshot from a “claims company” suggesting that they can claim MDR. In turn, the company will charge them a fee for pursuing a claim, and some may even be informing them of the potential claim value, in order to indicate what monies may be recovered.

In some instances, we have received calls from property owners who have been encouraged to modify their properties after they purchased them so that they can then pursue a claim for MDR. This practice is in breach of the HMRC guidelines and may be fraud. In other cases, we have received calls where consumers are being encouraged to pursue claims, where many of the features of an annexe (as defined by HMRC) don’t exist.

How we can help when HMRC pursue you for claimed MDR

Please do not be encouraged to make inappropriate claims for MDR as it can turn out to be an expensive mistake.

If you are being pursued by HMRC then, as long as the business that advised you to make a claim is still solvent, then we can potentially pursue a claim against them for your losses. Where we can do this for you, then we will pursue such a claim for any penalties and interest you are being charged under a “no win no fee” agreement. Please be aware that it is important that the business that originally advised you to pursue a claim for MDR is still trading.

For more information, please contact us via the form opposite, or by calling us on 0300 303 3819 or emailing info@lincolngreenlaw.com.