Stamp Duty Land Tax (SDLT) reforms proposed by the Government could penalise conveyancers who fail to use HM Revenue & Customs’ (HMRC) online filing service for SDLT return forms.

The news comes as part of HMRC’s ongoing tax systems overhaul, Making Tax Digital (MTD) – which seeks to reduce the 31,000 paper SDLT returns it currently receives each year.

According to the tax authority, four in every ten paper returns contain errors – which the Revenue believes could be avoided if more returns were filed using its online systems.

Incorrect, insufficient answers and unanswered mandatory questions are among the most common mistakes found in paper SDLT returns, it says.

Furthermore, approximately one third of all SDLT payments are made by cheque – which HMRC claims adds further delays and administrative annoyances to the SDLT transaction process.

An HMRC spokesperson said: “Problems can arise when the cheque is not received within 30 days of the effective date of the transaction, is sent without a correct UTRN (unique transaction reference number) or is sent to the wrong address”.

Now, the Government is warning solicitors and conveyancers to expect fines, should they fail to submit such returns online.

First announced in mid-August, the proposals come alongside the publication of a long-running consultation into SDLT, which seeks to cut the filing and payment window for stamp duty by more than half.

Under proposed changes, the current 30-day payment window will be cut to just 14 days.