Advisory board to government says existing paper stamping for share transactions is ‘anachronistic and cumbersome’
The Office of Tax Simplification (OTS) has urged the Government to digitise paper stamp duty on shares, bringing it in line with the digital options for stamp duty land tax and stamp duty reserve tax.
The independent adviser to government tax simplification has published a report on the issue, highlighting the fact that paper stamp duty still accounts for a sizeable minority of certificated share transactions, and describes the process as “anachronistic and cumbersome”.
It points to the time sensitive nature of many transactions and the fact that, while the Stamp Office offers a ‘same day’ facility, this involves the request of an appointment and travelling to Birmingham. Fewer than 50 requests are granted each year, and the OTS says its research showed that there would be a much higher demand for same day stamping if it was readily available.
It has made a core set of recommendations that include replacing the paper stamping with a digital process, and updating the rules governing company registrars so they are able to register transactions on the same day as and when required. Also, the scope of stamp duty should be limited to the transactions it applies to in practice.
Further recommendations include ensuring the digital process is developed in a way that secures the fullest benefits for those who pay and collect the tax.
Paul Morton (pictured), OTS tax director, said: “It is clear from our work that there is a significantly greater demand for the facility to register documents on the same day as the transaction than is possible with the current arrangements.
“Digitisation is the norm across business and commerce of all types. Digitising paper stamp duty, and taking some related simplification steps, will improve the whole process for those currently needing to have documents stamped.”
Stamp duty was the predecessor of the stamp duty land tax and stamp duty reserve tax, which were introduced in 2003 and 1986 respectively, and now mainly applies to share transactions undertaken using paper forms.
Image from GOV.UK, Open Government Licence v3.0