Out-Law / Your Daily Need-To-Know

Coronavirus: HMRC introduces electronic stamping of documents

Out-Law News | 02 Apr 2020 | 8:54 am | 1 min. read

An electronic stamping procedure for documents where stamp duty is payable has been introduced by HM Revenue & Customs (HMRC) in response to the coronavirus pandemic.

The new process, which will enable a document to be 'stamped' electronically rather than by applying the traditional physical stamp, was described as being "temporary" to enable HMRC to "continue dealing with Stamp Duty for the duration of this emergency period" in guidance issued by HMRC last week. The process is being introduced to allow both customers, advisors and HMRC staff to avoid having to travel away from their homes to stamp a document, as evidence that stamp duty has been paid. All payments of stamp duty should now be made electronically, by Faster Payment, BACs or CHAPS.

Jamie Robson, a corporate tax expert at Pinsent Masons the law firm behind Out-Law, said: "It is good to see HMRC responding practically to the difficulties faced by clients and practitioners in dealing with physical documents at this time and, of course, protecting its own employees that would otherwise have had to travel to work to apply the physical stamps".

Jamie Robson

Associate

Although the updated guidance is stated to be temporary in nature, it is to be hoped that serious consideration will be given to formalising an electronic stamping procedure once the current crisis is over.

"Although the updated guidance is stated to be temporary in nature, it is to be hoped that serious consideration will be given to formalising an electronic stamping procedure once the current crisis is over. That would provide at least one positive outcome from these troubled times," he said.

It is understood that when HMRC respond confirming that a stock transfer form is 'stamped' it will also confirm that the company registrar can write up the share books confirming the transfer of shares. The books cannot be written up until this confirmation is received.

Stamp duty is a tax on documents, which applies to stock transfer forms transferring shares for more than £1000. Duty is payable at 0.5% of the value of the shares, within 30 days of the shares being transferred. Transfer forms and other stampable documents had to be sent to HMRC's Birmingham Stamp Office for physical stamping alongside payment prior to the Covid-19 pandemic.