OTS calls to digitise paper stamp duty on shares
The Office of Tax Simplification, the independent adviser to the UK government on tax simplification, has called for a wide-ranging look at the potential for paper stamp duty to be reformed, digitised and simplified.
A new new OTS report on paper stamp duty published this week addresses taxpayers’ practical frustrations with paper stamp duty on shares.
Stamp Duty Land Tax (on land transactions) and Stamp Duty Reserve tax (on most share-trading) have been digitised for some years.
But stamp duty itself, which is charged on certificated share transactions taking place outside the CREST settlement system, is still administered by impressing paper stock transfer forms with physical stamps.
The OTS said the system represented an “outdated and cumbersome approach”.
In an effort to bring about reform, the OTS set out core recommendations as a result of its findings:
In addition, the report makes some more technical simplification proposals including:
Angela Knight CBE, Chair of the OTS Board, said: “In this digital age it is anachronistic to still be stamping paper documents as we did on the 17th century. This results in delays and can cause commercial difficulties, particularly when there is a commercial requirement to register a transfer on the same day as the transaction takes place. This report points the way to both modernise and speed up the process.”
Paul Morton, 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.”