One of the problems with the accountancy industry is traditionally that clients are obligated to take a lot on trust.  Only an accountant is really capable of telling whether someone else is a good accountant, and for many business owners they have only the word of their current accountant to go on.  This pattern tends to create cottage industries of cowboy accountants who make a living out of tenuous tax claims, dodgy submissions and the ability to vanish into thin air by the time HMRC finally get around to investigating the matter five years after the transactions took place.

The latest trick is a series of extremely tenuous Stamp Duty Claims.  The argument runs that savvy taxpayers can reduce their stamp duty bill by claiming that sections of properties they have purchased have non-residential uses.  This has resulted in some absurd claims over the last year, among them being:

The couple who bought a £3m property and claimed that the presence of a country lane running alongside classified the property as partially non residential

The couple who purchased a £4.4.m property and claimed that a sewage unit made the property mixed use


The latest attempt was a claim before the tax tribunal this week wherein a homeowner attempted to claim that a garage was not part of a his residential property and that by renting part of it out to a third party for the purposes of storing books, he was therefore not eligible for stamp duty on the whole of the site.  While the judge made some indications that such a claim could be theoretically allowable, the case was undermined by a few inconvenient facts:

  • The lease did not exist at the time of the completion of the house purchase.
  • The lease was to a “third party” company which was partially owned by the homeowner.
  • The garage did not have its own connection to the electricity grid and was part of the main house’s bill.
  • There was no grant of “exclusive possession” which is normally required for a lease.
  • In addition to this failure to grant exclusive possession, the taxpayer admitted that he was still storing his own possessions in the garage at the time of the lease.

Judge McKeever stated that

‘The lease requires the tenant to pay certain outgoings including electricity, referrable to the garage. There is no evidence that any such payments were made. Kozlowski gave evidence that while the tenancy at will be subsisted, he also stored his own possessions in the garage.

‘The tenant did not therefore have exclusive possession of the premises which is a fundamental attribute of a lease. Having considered all these matters, I conclude that the lease was not a genuine commercial arrangement. The whole of the property is therefore residential property.’


As always in the tax profession, there exists no shortage of “try-ons” by professionals who are well aware that they have nothing to lose and everything to profit by convincing taxpayers to make dubious claims.  Knowing where the law stands is always the way to approach these matters.