‘Indemnified’ SDLT Services Under Scrutiny as Liability Questions Raised

Compass has published a new comparison document and HMRC protection checklist designed to help law firms critically assess Stamp Duty Land Tax services and understand where SDLT responsibility and risk truly sit.

The documents respond to growing concern across the conveyancing sector that many SDLT services which appear similar on the surface operate in fundamentally different ways in practice. In particular, Compass highlights the distinction between providers that supply calculations or guidance and those that take full responsibility for the SDLT position and HMRC submission.

Compass’ analysis makes clear that where a law firm remains the submitting adviser, responsibility for the SDLT position does not transfer, even if a third party has assisted with calculations. In those models, firms may still need to register as tax advisers and defend SDLT positions they did not originate if HMRC raise questions after completion.

By contrast, the Compass Concierge service is structured so that Compass acts as the submitting tax adviser, taking responsibility for the SDLT assessment, calculation and submission, with an explicit indemnity supporting the position taken. This removes the need for the law firm to register as a tax adviser for SDLT and significantly reduces regulatory and professional risk.

Alongside the comparison, Compass has released a practical checklist for firms reviewing SDLT support. It focuses on the areas most likely to be scrutinised, including risk identification, audit trails, escalation of complex matters, indemnity scope and enquiry readiness. The checklist is intended to help firms look beyond marketing claims and assess whether a service provides meaningful protection rather than calculation alone.

Lidia Quinlan, Director at Compass, said:

“SDLT services often look comparable at first glance, but the real issue is responsibility. Firms need to be absolutely clear who HMRC treats as the tax adviser and who is standing behind the SDLT position if it is challenged.

A stated indemnity is only meaningful if the provider’s terms actually accept liability for the calculation. Some services market ‘indemnified’ outputs while their contractual terms seek to exclude liability for errors in the calculation itself. Firms should check what is truly covered, who stands behind the SDLT position, and what happens if HMRC challenges the return.

Our aim with these documents is to help firms ask the right questions and make informed decisions about risk, not just process.”

The guide comes at a time of increased regulatory focus on tax advice and professional accountability, with many firms reassessing whether their current SDLT arrangements genuinely remove exposure or simply repackage it.

The SDLT services comparison and HMRC protection checklist are available from Compass and are intended to support firms, compliance teams and partners when reviewing existing providers or considering outsourcing SDLT for the first time.

Click here to download the guide and checklist.

Kindly shared by Compass

Main article photo courtesy of Pixabay