The standard SDLT refund process feels reassuringly final: you file a claim, HMRC processes it, the money lands in your account, you move on. But under the SDLT enquiry rules, HMRC has a defined window after payment in which it can review the claim, request additional evidence, and — if it concludes the refund was not properly due — demand repayment, with interest and potentially penalties. This is the SDLT clawback, and it's been used more aggressively in recent years against weakly-supported chattels claims and disputed Multiple Dwellings Relief claims.
HMRC's enquiry windows
Standard enquiry window: HMRC can open an enquiry into an SDLT return (including an amended return claiming a refund) within nine months of the filing date. This is the most common period for an enquiry to begin.
Discovery assessments: Where HMRC believes a relevant fact was not disclosed at the time, it can issue a "discovery assessment" up to four years after the relevant tax year (six years if there was carelessness, 20 years if there was deliberate behaviour). These powers are much wider than the standard nine-month enquiry window and are increasingly the route HMRC uses against refund claims it doesn't agree with.
What this means in practice
Receiving a refund into your bank account is not the end of the story. The money is yours to use, but you may need to defend the claim in writing months later. Keep all your documentation for at least four years after the refund.
What triggers an enquiry
Risk-flagged claim types. HMRC has explicitly flagged several SDLT claim categories as high-risk, particularly chattels claims where the deduction looks disproportionate, Multiple Dwellings Relief claims on properties that do not obviously contain a second dwelling, and uninhabitable property claims where the property was clearly habitable at completion. Claims in these categories have a meaningfully higher enquiry rate.
Repeated claims by the same firm. HMRC monitors patterns of claims filed by individual refund agents. Firms that file many borderline claims attract greater scrutiny of all their filings.
Round-number deductions. A chattels claim showing exactly £10,000 worth of carpets, curtains, and white goods on a £400,000 purchase is more likely to attract attention than one showing £3,247.50 of specific itemised valuations.
Lack of supporting documentation. Claims that rely on vague descriptions ("various chattels included in sale") without specific itemisation, photographs, or contemporaneous documentation are easier for HMRC to challenge.
What an enquiry looks like
You (or your agent) will receive a letter from HMRC stating that they are opening an enquiry into a specified SDLT return. The letter will list the matters HMRC wants to examine and ask for specific documents within a defined period (usually 30 days). Common requests include the TA10 Fittings and Contents form, the original purchase contract, photographs of any chattels claimed, surveyor's reports for uninhabitable property claims, and floor plans for MDR claims.
Provide everything you have, in clean copies, on time. If the documentation supports the original claim, the enquiry is usually closed with a "no further action" letter within a few months. If HMRC remains unconvinced, they will issue a closure notice with their proposed adjustment, which you have a right to dispute via formal review or tribunal.
How to protect yourself
Document everything at the time of claim. The strongest enquiry defence is contemporaneous evidence. TA10 form, photographs, receipts for chattel-replacement work, surveyor reports — gather these before filing the claim, not after.
Be conservative on values. Use second-hand market values for chattels, not new-replacement values. A claim that values a five-year-old fridge at £150 is harder to challenge than one valuing it at £600.
Avoid round numbers. Itemise specifically. List the kettle, the toaster, the carpets, the curtains. £4,237 is more credible than £4,250 or (worse) £5,000.
Use a reputable adviser. Firms that have been around for a while, file claims professionally, and don't make outlandish promises are less likely to attract HMRC attention. See our piece on how to evaluate a refund firm.
What if HMRC wants the money back
If HMRC concludes a refund was paid in error, you will receive a determination requiring repayment of the refund, plus interest at the statutory rate (currently around 7% from the date the refund was paid), plus potentially penalties (5% to 30% depending on the behaviour involved). You have rights to formal review and to appeal to the First-tier Tribunal.
Many borderline cases settle without going to tribunal — particularly where the documentation was incomplete but the underlying entitlement is broadly defensible. A specialist tax adviser can usually negotiate a reasonable settlement if the case has merit.
Keep your records
We strongly recommend keeping every document associated with an SDLT refund — claim form, supporting evidence, HMRC correspondence, repayment notification — for at least four years after the refund. If you used a paid agent, keep their reports too. You will be grateful for these records if an enquiry letter ever lands.
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