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Pedant
I don't mean to be pedantic, but one would have thought that a legal ombudsman could at least get the name of the tax right (especially when criticizing others for sloppiness etc.).
It's surprisingly common practice
Not for firms to 'permanently borrow' the stamp duty, but for it to be transferred to office account before it is paid to HMRC.
I have increasingly seen this with firms we deal with. The legal ombudsman article mentions what clients can/should do when they discover the loss and the firm has gone out of business or in the event it cannot pay (claim from the PI insurers), but what anyone using a solicitor nowadays must be mindful of is the risk of the solicitor/firm getting into financial difficulty and take appropriate precaution, which applies to accountants and other professionals too, to ensure that a solicitor provides details and evidence of existing PI cover AND is instructed to transfer funds upon receipt directly to the client without any deduction, set off, or otherwise. Whilst this causes any client a little inconvenience as they will now need to pay HMRC themselves, it will be less than the inconvenience of finding out later that something went wrong.
Some people will say why should clients be alert to the risk of a solicitor being in difficulty, my response is that nobody really considered it was a possibility with a bank and then the run on Northern Rock happened, oh and then the RBS went slightly south, oh and then there was Lloyds, and let's not forget Equitable Life all those years ago. Financial difficulty can effect anyone in any industry nowadays, nobody is safe, including the National Charity I have just been asked to work with.
I know clients should be able to trust their legal advisers given their position within society, but I seem to remember bankers holding a well respected position in society some time ago.
Interesting timing
I can't help thinking that this idea looks even worse in light of the above story.
Interesting you should say that
I was sat next to someone from the ICAEW yesterday and they are up in arms about it.
Given various issues, especially the risks re insurers going bust, it is surprising in one sense, but I do have some knowledge and understanding behind the rationale and its not complete madness, but still it's not perfect.
I am with the SRA and law society tomorrow funnily enough as we are all speakers at a conference and I am looking forward to hearing what they have to say about it!
non residents CGT charge
It makes you wonder how the with- holding CG Tax proposed in the recent HM treasury consultation paper will be collected. Given that most of the property concerned will be sited in London and the south of England and given that 39% of complaints were from that area this new revenue raising scheme looks like :-
A/ an accident waiting to happen or
B/ A bonanza for iffy lawyers
depending on your point of view!!
LBTT should be followed
Its now time for England& Wales to follow the new Scottish replacement for SDLT (known as LBTT) which sees the tax payable before title can be registered (oh and don't let me get started on the Scots abolition of the slab system either)
A leading forensic accountant ...
... tells us at CPD lectures on fraud that lawyers are by far the biggest sector whe looking at fraud, both in numbers and amounts defrauded.
Teeming and lading through the cleint account is the main way they do it.
Isn't it nice to know..
...that all the increasing over-regulation & bureaucracy we all must constantly endure is so successful in stamping out such frauds?
How do they register the transfer at the Land Registry?
@carat : I did my own conveyancing and I had to pay HMRC and provide an electronic receipt from HMRC's online SDLT service to the Land Registry before they would register the title in my name. Do solicitors use a different system?
It's worse than that...
When I re-mortgaged a few years ago, the process was handed to a young thing who was appointed to deal with it by the bank (free service if you use their "in-house legal service", which was actually outsourced to a separate firm).
The first time it came through with SDLT payable I checked that the facts were as per my expectation (that SDLT was not payable on a re-mortgage) and told her that.
After a little discussion, where she tried to persuade me quite forcefully that it was payable, she reluctantly agreed. A few days later... another set of documents arrived and AGAIN it showed SDLT as being payable. I called her again and had the same conversation - she even claimed that she had no recollection of our previous conversation on the subject.
This seemed entirely incompetent to me, given that that's all these people do all day they should know in spades what is payable and when - and when it's not due,
I was annoyed by this time, so I complained to one of the "senior" partners in the firm who filled the role of dealing with complaints. I found the usual closing of ranks one finds in most companies these days and eventually gave up (as the process is designed to achieve).
It was only when I read this article that it occurred to me... that maybe this was not incompetence, maybe it was a deliberate attempt to line their pockets by fraudulent means.
Perhaps I should resurrect this complaint and take it to the Ombudsman? I can't help but wonder how systemic it may be to rip off some poor folks who are re-mortgaging and don't realise that SDLT is not payable, I'm sure many people who will just stump up the cash.
Goes hand in hand with estate agents ...
... trying to charge 2% finders fee to the buyer - sheer greed imho, and most of them are worth than useless.
I reckon they will shoot themselves in the foot, there are plenty of online agencies that charge a fixed fee and this will just encourage people to use them.
Euphemism
Presumably 'sloppy legal work' is a euphemism for blatant criminality, at least when lawyers are talking about other lawyers?
I've long suspected that lawyers were the people with the least respect for the law but some of them obviously have a total contempt for their clients too.
Or am I being a tad uncharitable?
In my view ...
Presumably 'sloppy legal work' is a euphemism for blatant criminality, at least when lawyers are talking about other lawyers?
I've long suspected that lawyers were the people with the least respect for the law but some of them obviously have a total contempt for their clients too.
Or am I being a tad uncharitable?
... NO