Electronic Signatures and SDLT Reclaims with HMRC
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Can a Stamp Duty Reclaim Firm Ask for ID, Signatures and Payment After an HMRC Refund?
Introduction
People who use a specialist firm to pursue a Stamp Duty Land Tax (SDLT) reclaim often want to know what documents the firm can properly ask for, whether electronic signatures are acceptable, and what happens once HMRC pays a refund. Questions also arise where the firm later asks for proof of identity or issues an invoice after the reclaim succeeds.
This article explains that type of situation in general terms. It looks at the practical steps in a reclaim process, why ID documents may be requested, how authority documents are usually handled, and what a client should check before paying a fee invoice following a successful HMRC repayment.
The Question
A taxpayer instructed a reclaim firm to pursue an SDLT refund from HMRC. During the process, the firm sent an authorisation letter and terms of agreement for signature. It said one document could be signed electronically, but the authority document needed to be signed and returned in a form suitable for submission. The firm also asked for a copy of the taxpayer’s passport for identification purposes.
Later, the taxpayer was told that the case was being prepared for submission to HMRC. HMRC then appears to have made a repayment directly to the taxpayer. After that, the firm asked the taxpayer to confirm the refund amount so that it could prepare its invoice. There were then practical problems with the payment link and invoice format.
The underlying issue is whether those requests and next steps are normal and what the taxpayer should check before paying.
Nick’s Explanation
Nick’s explanation, put into general terms, was essentially that the firm needed the signed authority and ID documents to progress the reclaim properly, and that once HMRC had paid the refund, the next step was to confirm the amount received so the agreed fee could be invoiced.
In anonymised form, the key points were:
- electronic signing may be acceptable for some contractual documents;
- an authority letter may need to be returned in a specific form that HMRC or the firm can rely on;
- ID documents may be requested because of compliance and anti-fraud checks;
- once the refund has been received, the firm may ask for the exact amount so it can calculate its fee under the agreement;
- if there is an invoice or payment-link problem, that is an administrative issue that should be corrected before payment is made.
That general explanation is consistent with how many SDLT reclaim arrangements work in practice, but the taxpayer should still check the contractual basis for any fee and make sure the reclaim was valid.
The Law
SDLT is charged under the Finance Act 2003. A taxpayer who believes too much SDLT was paid may in some cases amend the return or make a repayment claim, depending on the nature of the issue and the timing.
Where an agent acts for the taxpayer, HMRC will usually expect clear authority for that agent to correspond or act on the taxpayer’s behalf. The exact form of authority can vary depending on the type of claim and the route being used.
There is no single rule in the Finance Act 2003 saying that a reclaim firm must always obtain a passport copy. However, firms providing tax services commonly carry out client due diligence and identity checks. That is partly for anti-money laundering compliance and partly to reduce fraud risk and ensure they are dealing with the correct taxpayer.
If a firm charges a fee for preparing and pursuing the reclaim, the right to that fee depends primarily on the contract between the taxpayer and the firm. In many SDLT reclaim cases, the fee is contingent on success and is calculated as a percentage of the tax refunded. If so, the amount due will usually depend on the actual repayment received from HMRC.
If the reclaim itself was based on the property being uninhabitable or not suitable for use as a dwelling, readers should be aware that the legal threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. Serious disrepair or inconvenience will not necessarily be enough. The condition must be such that the property is not suitable for use as a dwelling at the effective date of the transaction, applying the stricter approach confirmed by the Court of Appeal.
Analysis
The position can be analysed in stages.
Authority to act
If a reclaim firm is going to submit a claim or communicate with HMRC for the taxpayer, it is normal for the firm to ask for a signed authority letter and signed terms of business. A firm may accept an electronic signature on its own contract, but require a more formal signature format for the authority document if that is what its internal process or HMRC-facing procedure requires.
Proof of identity
A request for a passport copy is not unusual. Tax agents and reclaim firms often ask for ID to verify the client’s identity and to meet compliance obligations. A taxpayer should still make sure the request is genuine, that the firm has been properly instructed, and that documents are being sent through a secure channel.
Submission to HMRC
Once the signed documents and ID are received, the firm may prepare the reclaim for submission. If HMRC accepts the claim, the refund may be paid either to the taxpayer directly or sometimes to the agent, depending on the authority and claim process used.
Confirmation of refund amount
If the fee arrangement is based on the amount recovered, the firm will need the exact amount of the refund to calculate its invoice. That is why a request to confirm the repayment figure is generally consistent with a contingent-fee arrangement.
Invoice and payment problems
If the payment link fails, the invoice shows the wrong currency, or the payment page appears inconsistent with what was agreed, the taxpayer should not simply pay and hope for the best. The correct step is to ask for a corrected invoice showing the agreed amount, the correct currency, and the contractual basis for the fee.
Checking whether the reclaim was valid
This is the most important substantive point. A taxpayer should not focus only on whether the administration was handled properly. They should also consider whether the reclaim itself had a sound legal basis. This matters because HMRC can enquire into claims and may seek repayment if a refund was wrongly made.
That is especially important in claims based on a property being uninhabitable. Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the threshold is demanding. A property is not treated as unsuitable for use as a dwelling merely because it needs works, has defects, or is uncomfortable or inconvenient to occupy. The issue is whether, at the effective date, the condition was serious enough that it was genuinely not suitable for use as a dwelling.
Outcome
In general, it is normal for an SDLT reclaim firm to ask for signed authority documents, terms of business, and proof of identity before progressing a claim. It is also normal for the firm to invoice its fee after HMRC has paid the refund, if that is what the agreement provides.
However, the taxpayer should only pay once they have checked:
- that they did sign terms clearly setting out the fee basis;
- that the refund amount used to calculate the fee is correct;
- that the invoice is accurate and in the correct currency;
- that the reclaim itself was legally sustainable.
If the reclaim was based on an uninhabitable dwelling argument, extra caution is needed because the current legal threshold is relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
Practical Steps
- Find the signed terms of agreement and check exactly how the fee is calculated.
- Confirm whether the fee is a percentage of the gross HMRC repayment or some other figure.
- Check that the amount refunded by HMRC matches the amount used in the invoice.
- Ask for a corrected invoice if the payment link is broken, the currency is wrong, or the invoice lacks detail.
- Keep copies of the authority letter, terms, HMRC repayment confirmation, and all correspondence.
- If the reclaim was based on the dwelling being uninhabitable, review the facts carefully against the stricter approach in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
- Consider getting independent tax advice if you are unsure whether the reclaim was valid or whether the fee demanded matches the agreement.
Conclusion
A reclaim firm’s requests for signatures, ID and confirmation of the refund amount are usually part of the normal SDLT reclaim process. The key questions are whether the firm had proper authority, whether the fee matches the contract, and whether the reclaim itself was legally sound. In uninhabitable property cases, the law now sets a relatively high bar following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
Legal References Used
- Finance Act 2003
- Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799
This page was last updated on 22 March 2026.
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