SDLT enquiry windows and HMRC compliance check letters: how the process works (2026)

Most Stamp Duty Land Tax returns are filed, paid and forgotten. A minority attract a letter from HM Revenue & Customs — a compliance check that can lift, amend or replace the amount declared on the original SDLT1 return. This piece sets out how the enquiry and discovery framework works in plain English: the windows, the powers, the response clock, and where the process intersects with the routes covered in other guides.

Across the dataset that powers Homecost, 760,361 transactions in England and Wales were registered at HM Land Registry in 2025 above the £125,000 SDLT nil-rate threshold (Homecost analysis of HM Land Registry Price Paid data, retrieved 26 May 2026). Each of those filings starts a clock — and a smaller, but non-trivial, share will see a letter from HMRC inside that window.

The two routes HMRC can use to challenge a return

There are two statutory routes by which HMRC can revisit an SDLT return after it has been filed. The procedural differences matter because each has its own time limit, evidence threshold and response mechanic.

Source: Finance Act 2003, Schedule 10 (Returns, enquiries, assessments and appeals) (legislation.gov.uk). HMRC's interpretive guidance sits in the SDLT manual at SDLTM50000 onwards.

The 9-month enquiry window is the more commonly encountered route. A discovery assessment is the fallback HMRC uses once the enquiry window has closed and information has come to light that the officer says they could not reasonably have been aware of from the return itself.

The 9-month enquiry window (Sch 10 para 12)

For SDLT, paragraph 12 of Schedule 10 gives HMRC nine months from the date the SDLT return was filed to give notice of an enquiry. The clock runs from the filing date, not the completion date — relevant where the return was filed late, in which case the enquiry window also shifts later.

Two procedural points often overlooked:

• The notice itself is the enquiry trigger. HMRC does not need to set out a reason or a suspected error at the opening stage. The letter — typically headed "Compliance check into your Stamp Duty Land Tax return" — only needs to identify the return, the transaction and the reference.
• Once an enquiry is open on a matter, that matter cannot be self-amended. Paragraph 6 of Schedule 10 freezes the amendment route on any point that falls inside the scope of an open enquiry. The buyer must wait for the enquiry to close (or be partially closed by direction of the tribunal) before correcting the same matter.

The amendment route — used by buyers who notice their own error and want to put it right — is covered in the SDLT amendment and higher-rate refund process guide. The amendment window is shorter (12 months from the filing date for the buyer's own amendment) and is the cleaner route where it remains open.

Discovery assessments (Sch 10 para 28)

Once the 9-month enquiry window has closed, HMRC's only route back into the return is a discovery assessment under paragraph 28 of Schedule 10. The procedural test is set out in paragraph 30:

• 4 years from the effective date of the transaction is the standard window, where the under-declaration arose without carelessness or deliberate conduct.
• 6 years where the loss of tax was brought about carelessly by the buyer or a person acting on their behalf (typically a conveyancer who failed to apply a rule correctly).
• 20 years where the loss was brought about deliberately, or where a disclosable scheme was not notified under the DOTAS regime.

"Carelessness" carries a meaning developed through tribunal case law — broadly, a failure to take the care that a reasonably prudent person in the buyer's position would have taken. A conveyancer's misapplication of a rule (for example, treating a purchase as a first-time buyer purchase when one of the joint buyers had owned a property abroad) typically attaches to the buyer for the purposes of paragraph 30.

The discovery route is the path most often used to recover SDLT where HMRC concludes — sometimes years later — that a relief was claimed in error or the additional-property surcharge was missed. The failure modes catalogued in the SDLT refund failed cases guide sit in the same statutory frame.

What an HMRC compliance check letter actually asks for

HMRC's published compliance-check correspondence follows a standard template — the CC/FS1a factsheet "General information about compliance checks" is enclosed with the opening letter, and a follow-up information request will typically cite the relevant CC/FS series factsheet.

For an SDLT compliance check the request usually covers some combination of the following:

• The completion statement and the breakdown of the consideration (price plus any chattels, fixtures, premium or assumed debt).
• Evidence of the buyer's residency for the 2% non-resident surcharge — days-of-presence records, employment letters, immigration records. The evidence standards are set out in SDLTM09870.
• Evidence of first-time-buyer status — declarations, prior-ownership history (including overseas ownership), and the trust position if a parent or third party contributed to the deposit.
• Whether the additional-property surcharge under Schedule 4ZA applied — interests held by spouses or civil partners are aggregated, as is any beneficial interest under a bare trust.
• Multiple Dwellings Relief working (for transactions completed before the relief was abolished on 1 June 2024).

A worked example: a buyer pays £425,000 for a residential property in England, files an SDLT1 declaring £11,250 of tax (standard rate, no first-time-buyer relief — see the HMRC SDLT residential rates page for the slabs, or run the numbers via the Homecost stamp duty calculator at £425,000). An enquiry letter arrives seven months later asking for evidence that a £30,000 chattels allocation was a genuine apportionment to moveable items, not a price-reduction device to drop into a lower band. The enquiry can run for the duration the officer reasonably requires; the buyer cannot amend the chattels figure while the enquiry remains open on that point.

Schedule 36 information notices and the 30-day clock

Where an enquiry has been opened (or a discovery is being worked up), HMRC can compel the production of documents and information using a Schedule 36 FA 2008 information notice. Three procedural points:

• The default response window is 30 days from the date of the notice, though HMRC will frequently agree a longer period on request where the documents need to be retrieved from a conveyancer's archive or a third party.
• Refusal carries a fixed penalty. Paragraph 39 of Schedule 36 sets the initial penalty at £300, with daily penalties of up to £60 thereafter under paragraph 40. Where a tribunal-approved notice was issued and the failure continues, paragraph 49A allows daily penalties of up to £1,000.
• Right of appeal is limited. A notice approved in advance by the First-Tier Tribunal (FTT) under paragraph 3 cannot itself be appealed; only the underlying penalty can. A non-tribunal-approved notice carries a right of appeal under paragraph 29.

Conveyancers will normally hold the file for at least six years (in line with their professional record-retention rules); buyers should not assume that the documents have been kept indefinitely. The closure-of-file letter from a conveyancer typically sets the retention period and the contact for retrieval.

The closure notice and the route to the tribunal

An enquiry ends when HMRC issues a closure notice under paragraph 23 of Schedule 10. The closure notice sets out the conclusions of the enquiry and, if appropriate, an amendment to the return. Two routes follow:

• Accept the conclusions. The amendment becomes effective 30 days after the closure notice unless the buyer appeals.
• Appeal to the First-Tier Tax Tribunal. Paragraph 35 of Schedule 10 sets out the appeal rights; the appeal is to the Tax Chamber of the FTT and is normally lodged within 30 days of the closure notice.

There is also a power to ask the FTT to direct HMRC to issue a closure notice where an enquiry has stretched unreasonably — paragraph 24 of Schedule 10. This is the procedural lever where an enquiry has gone quiet for months or years.

Where the dispute concerns the application of a relief or a contested factual matter (residency, chattels apportionment, beneficial-interest analysis), the FTT will hear evidence and reach a finding. The refund process for higher-rate cases intersects with this framework where a refund claim is refused — the same appeal route applies to a refusal as to a closure-notice amendment.

Penalties: the late-payment and inaccuracy stack

Where a compliance check finds that additional tax is due, HMRC will normally also seek interest (currently charged from the original due date) and may seek an inaccuracy penalty under Schedule 24 FA 2007. The penalty range depends on whether the inaccuracy was:

• Careless — 0% to 30% of the potential lost revenue.
• Deliberate but not concealed — 20% to 70%.
• Deliberate and concealed — 30% to 100%.

A buyer can reduce the penalty inside each band by the quality of their disclosure: telling HMRC about the inaccuracy ("telling"), helping HMRC quantify it ("helping"), and giving access to records ("giving"). The reduction is highest where the disclosure is unprompted — voluntary disclosure before HMRC opens an enquiry sits in the most favourable band of Schedule 24 paragraph 9.

Practical mechanics, not advice

The procedural shape is consistent: an opening, a fact-finding phase, a closure, and an appeal route. Where the underlying SDLT computation is the issue, the Homecost stamp duty calculator at £425,000 (or any other price point) can be used to reproduce the figure on the original return and on the proposed amended return — the slabs, reliefs and surcharges feed in. Cross-regime mechanics for buyers in Scotland or Wales are covered in the SDLT vs LBTT vs LTT cross-regime comparison; the enquiry framework is broadly mirrored but the windows and statutory references differ.

Browse other procedural pieces in the Cost Intelligence category for related coverage of refund routes, surcharge mechanics and threshold rules.

This is general information about the procedural framework, not advice on a specific case. Speak to a qualified adviser — typically a conveyancer or a SDLT specialist tax adviser — before acting on a compliance-check letter.

Based on 760,361 SDLT-liable HM Land Registry transactions registered in England and Wales in 2025, retrieved 26 May 2026. Statutory references current as of the same date.