The Victorians designed a stamp duty collection system that required one or more coloured stamps to be embossed on a document at one of the local stamp offices around the UK. This machinery is still in use!
There is now only one stamp office, in Birmingham, to which affected documents – mainly those transferring shares - have to be posted, with a turnaround time of around a month. It might be possible to secure a same day stamping personal appointment – only about 50 are granted a year – but this will have to be before the machinery closes at 2pm so that the date stamp may be manually changed for the following day.
Why does this matter? A company’s share register cannot be updated until the stamped document has been returned, and sometimes this needs to be done quickly. We have developed strategies for our clients to allow the register to be updated sooner, but these are complicated and expensive.
Inspired by our work with the Tax Law Reform Committee of the Institute of Fiscal Studies, in 2017 the Office of Tax Simplification recommended various changes to the stamp duty system, including the digitalisation of the stamp duty process. Whilst the Government is currently consulting on another of the OTS’s recommendations, it has failed to tackle this archaic stamping process.
Stamp taxes for land transactions and for shares traded through Crest, for example, are already collected electronically. The IFS’s recommendation, which was not endorsed by the OTS, was that stamp duty should be collapsed into this existing electronic regime. But even if stamp duty is to remain a separate tax, we still need a regime that is fit for purpose. Is a Victorian stamping machine consistent with the UK’s image as a modern financial centre that embraces innovation?