BBC NewsBorrowing was £17.4bn last month, the second highest October figure since monthly records began in 1993.
Patrick Crowder
The property market in the UK has faced unprecedented challenges in recent years, with the Stamp Duty holiday—introduced to offset the economic impact of the pandemic—creating a whirlwind of activity. As property lawyers and conveyancers rushed to file Stamp Duty Land Tax (SDLT) returns before the tax break tapered off, many miscalculated the amounts owed. These errors have had a ripple effect, driving up professional indemnity (PI) insurance premiums by as much as 30%. Enter SDLT Compass, a groundbreaking tool designed to simplify SDLT calculations, reduce legal risks, and offer peace of mind to professionals in the property sector.
SDLT Compass is a new, innovative SDLT calculator launched on May 1, 2021, by Cornerstone, a firm of chartered tax advisors. Initially developed as an in-house solution, Compass quickly evolved into a market-ready tool after Cornerstone identified a growing demand for accurate and reliable SDLT calculations. Unlike traditional calculators, Compass doesn’t just crunch numbers—it takes legal responsibility for the results it provides, shifting the burden of PI risk away from property lawyers and conveyancers.
Chris Ward, Managing Director of SDLT Compass, explains, “One of the biggest advantages of Compass is that it reduces the PI risk for professionals. With claims against law firms for SDLT errors on the rise, this tool offers a safer, more efficient way to handle Stamp Duty Land Tax filings.”
When a property changes hands in the UK, an SDLT return must be filed with HM Revenue & Customs (HMRC) unless the transaction is exempt or qualifies for one of the 49 relief categories. Getting this process wrong can expose property lawyers to significant liability. Missteps in SDLT calculations don’t just lead to financial penalties—they can tarnish a firm’s reputation and increase PI insurance costs, which have spiked dramatically as insurers adjust to the growing number of claims.
The Stamp Duty holiday, which raised the SDLT threshold from £125,000 to £500,000, amplified these issues. With the tax break beginning to taper off on June 30, 2021, and ending completely on October 1, 2021, the pressure to file accurate returns intensified. Industry estimates suggest that one in five SDLT payments during this period were incorrect, highlighting the scale of the problem.
For property lawyers and conveyancers, the consequences of miscalculating SDLT are steep. Beyond the immediate financial penalties, errors open the door to negligence claims from clients. These claims, in turn, drive up PI insurance premiums, with some firms reporting increases of up to 30%. As Ward notes, “There’s a lot of litigation happening right now against law firms for getting SDLT wrong. It’s a costly problem, both in terms of time and money.”
This is where SDLT Compass steps in. By providing a legally backed calculation tool, it minimizes the risk of errors and protects professionals from the fallout of inaccurate filings.
Using SDLT Compass is straightforward. Users complete a questionnaire that takes about five minutes once they’re familiar with the process. The tool analyzes the input and generates an SDLT calculation, flagging any potential issues for manual review. For the 90% of property completions classified as standard, Compass delivers fast, reliable results. In complex or high-risk cases—such as those involving multiple reliefs or unusual transactions—the tool refers the matter to a tax analyst team for specialist advice on an agreed-fee basis.
“There’s no subscription or license fee,” Ward explains. “It’s £50 per SDLT calculation, and we offer a 14-day free trial so users can get comfortable with the software.” This pay-as-you-go model makes Compass accessible to firms of all sizes, from solo conveyancers to large legal practices.
Unlike other SDLT calculators—including the widely used HMRC tool—Compass stands out for its comprehensive approach. The HMRC calculator, while convenient, has significant limitations. Last year, HMRC admitted it’s merely an “estimator,” not a definitive calculator, and it fails to account for the 49 reliefs that can reduce or eliminate SDLT liability. This oversight leaves property lawyers vulnerable to errors, especially in complex transactions.
Compass, by contrast, incorporates all 49 reliefs and stays ahead of legislative changes. “We’ve tested it rigorously,” Ward says. “For example, when the 2% SDLT surcharge for non-resident purchases took effect on April 1, 2021, we updated Compass within an hour.” This agility ensures users always have access to the most current and accurate calculations.
Moreover, Compass is the only SDLT calculator that assumes PI responsibility for its outputs. This unique feature gives property lawyers and conveyancers a safety net, reducing their exposure to claims and helping stabilize PI insurance costs.
The Stamp Duty holiday was a lifeline for the property market during the pandemic, boosting transactions by raising the SDLT threshold. Normally, the UK sees around 100,000 property completions per month. During the holiday, that number surged to 120,000 as buyers raced to take advantage of the tax break. However, the increased volume also amplified the risk of errors, with many professionals struggling to keep up.
Although Compass’s launch wasn’t deliberately timed with the holiday’s end, Ward sees the timing as advantageous. “There’s a growing focus on protecting law firms from SDLT-related claims, so the market is ripe for a tool like this,” he says. As the tax break phased out—tapering from June 30, 2021, and ending on October 1, 2021—Compass positioned itself as a solution to the chaos left in its wake.
Since its launch, SDLT Compass has gained traction quickly. “We’ve signed up our first ten clients and had 50 free trials in the last three weeks,” Ward reports. The tool’s ease of use, affordability, and legal protections have resonated with property professionals looking to streamline their workflows and reduce risk.
Ward envisions Compass capturing 10% of the UK conveyancing market within two years, performing 10,000 SDLT audits per month. Given the tool’s early success and the persistent demand for accuracy in SDLT filings, this goal seems well within reach.
Beyond its technical capabilities, SDLT Compass offers practical benefits for law firms. Defending a single SDLT-related claim can cost thousands in legal fees and countless hours of staff time. By reducing the likelihood of errors—and taking on PI responsibility—Compass helps firms avoid these headaches altogether.
“Once Compass is embedded in an organization, it’s going to save a lot of money and time,” Ward predicts. “It’s not just about compliance—it’s about efficiency and protecting your bottom line.”
As the property market adjusts to the post-holiday landscape, the need for reliable SDLT tools has never been greater. With one in five SDLT payments historically incorrect and PI insurance premiums soaring, property lawyers and conveyancers face mounting pressure to get it right. SDLT Compass offers a lifeline: a fast, accurate, and legally backed solution that mitigates risk and enhances productivity.
For firms still relying on outdated tools like the HMRC calculator, the switch to Compass could be a game-changer. Its ability to handle complex reliefs, adapt to new legislation, and shield users from liability makes it an essential asset in today’s fast-paced property sector.
SDLT Compass is more than just a calculator—it’s a response to a systemic problem in the UK property market. As legislation evolves and transaction volumes fluctuate, tools like Compass will play a critical role in keeping professionals compliant and competitive. Whether you’re a conveyancer handling dozens of completions or a lawyer navigating high-stakes deals, SDLT Compass promises to simplify the process and protect your practice.
