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Charcol attacks 'hugely unfair' stamp duty

Monday, 10 March 2008 12:00 AM

Mortgage broker John Charcol has rounded on configuration of the present stamp duty system, branding it "hugely unfair".

And with chancellor Alistair Darling's first Budget scheduled to take place later this week, the organisation is calling on the government to reform the thresholds under which the system operates.

"Stamp duty really is a tax for nothing, and should be completely abolished, but that is an unrealistic expectation," said Drew Wotherspoon of Charcol.co.uk.

"Therefore, the system must be reformed to help make it fairer for many buyers."

In response to the perceived injustice, the company advises the government to reform the payment of stamp duty to mirror that of income tax - i.e. only taking payment on the amount over certain thresholds.

For example, one suggestion would be for the new tax rates to be one per cent on the first £200,000, five per cent on the next £800,000 and six per cent on anything above £1 million.

Under this scenario the tax payable on a £500,000 purchase would be exactly the same (£15,000) with a £1 million purchase also exactly the same (£40,000). At all other prices below £1 million the tax would be less than at present and above £1 million, which would include many commercial properties, it would be more.

In support of their request, Charcol has collected a petition of some 10,400 signatures calling for change.

"The petition was launched in November of last year, so 2,500 signatories a month shows that there are strong feelings about the subject," said Mr Wotherspoon.

"We are hoping the chancellor chooses to heed the countless calls for reform, but if he doesn't then the petition will continue to grow and we will present it to him in due course."

"It is now time for the chancellor to do something about it," concluded Mr Wotherspoon.

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