Can HMRC ask for an SDLT refund back after paying it, and how should mismatched refund figures be checked?

Introduction

Readers often search for this issue when an SDLT refund has arrived, the payment reference does not clearly identify the property, and there is concern that HMRC may later challenge the repayment. A second common problem is accounting: the figures shown in refund confirmations, invoices and bank receipts do not always match neatly, especially where more than one claim has been handled at the same time.

This article explains the position in general terms. It looks at what it usually means when HMRC says a claim has been paid, when HMRC could still revisit the matter, and how to reconcile several SDLT refund amounts across different properties.

The Question

A property owner had made several SDLT refund claims in relation to multiple dwellings. Some claims had already been paid and the adviser’s fees had been settled. Other claims were said to have been paid by HMRC, but the bank receipt did not clearly identify which property each payment related to.

One refund payment received from HMRC did not carry the expected claim reference. The owner therefore wanted to know:

• whether a paid SDLT refund could still be challenged by HMRC and clawed back;
• whether HMRC’s note on one claim meant there was an active enquiry or merely confirmation of payment;
• how to reconcile a single refund amount against more than one property claim;
• why invoice descriptions had changed where one earlier invoice had been issued against the wrong property; and
• what to do where the total of the listed claim amounts did not match the total banked from HMRC.

Nick’s Explanation

Nick’s explanation, put into general public-facing terms, was that HMRC’s internal note appeared to show the claim had been paid rather than that a formal enquiry had been opened. In his words, anonymised for publication, “there is currently no indication of an enquiry, so we must assume they do not presently intend to investigate the case.”

He also explained that if HMRC did later open an enquiry, the case could still be defended. He further said that HMRC payment references are not always applied correctly, so a bank receipt may not always match the expected SDLT claim identifier even where the money does relate to the relevant claims.

On the accounting side, Nick accepted that an earlier invoice had been incorrectly worded and said a revised invoice and credit note should be used so that the records matched the correct property and claim history.

The important practical point from his explanation is this: a payment from HMRC does not automatically mean the matter can never be revisited, but a paid claim is not the same thing as an open enquiry. Those are different stages and should not be confused.

The Law

SDLT is governed principally by the Finance Act 2003. A taxpayer who believes too much SDLT has been paid may in some circumstances amend the return or make a repayment claim, depending on the reason for the overpayment and the procedural route available.

Once HMRC has processed and paid a repayment, that does not completely remove HMRC’s powers. HMRC may still be able to check the return or challenge the repayment if the statutory conditions for doing so are met and the relevant time limits have not expired.

In broad terms, the legal framework usually involves:

• the original SDLT return and any amendment window;
• HMRC’s compliance and enquiry powers;
• possible discovery or assessment powers in some circumstances; and
• repayment recovery where HMRC concludes that tax was repaid in error.

Where the underlying refund claim depends on the property being uninhabitable or not suitable for use as a dwelling at the effective date of transaction, readers should note that the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. That case makes clear that serious disrepair alone will not always be enough. The condition must be such that the property is not suitable for use as a dwelling, and the courts now take a stricter approach than many earlier refund promoters assumed.

Analysis

The issue can be broken down into four separate questions.

First, does “paid” mean “safe from challenge”? Not necessarily. If HMRC has paid a refund, that usually means the claim has been processed and a repayment authorised. But HMRC may still open an enquiry or otherwise challenge the position if the law permits and the time limit has not expired. So the correct conclusion is not that the claim is beyond challenge, but that payment alone is not evidence of an active dispute.

Second, does an HMRC note or query automatically mean there is an enquiry? Again, not necessarily. Administrative notes often record that a repayment has been issued, that a case has been reviewed, or that HMRC has updated its system. A true enquiry is a more specific procedural step. If HMRC has opened one, there is usually clearer wording and formal correspondence. On the facts described here, Nick’s view was that the note was about payment status rather than a live challenge.

Third, how should a taxpayer deal with a refund that has the wrong or incomplete reference? The safest approach is not to guess. Instead, reconcile the payment by comparing:

• the amount expected for each claim;
• the dates on which claims were submitted or approved;
• any interest element included by HMRC;
• whether more than one claim may have been paid together; and
• whether an earlier invoice or statement was issued against the wrong property and later corrected.

That matters because a single banked figure may reflect multiple repayments, or a repayment plus statutory interest, rather than one property alone.

Fourth, what if the arithmetic does not match? If one list says the relevant claims were, for example, £9,750, £2,250 and £2,460, but the amount received from HMRC was £14,036.06, there is an obvious reconciliation problem. That discrepancy may arise because:

• one amount includes interest and another does not;
• one property was counted twice in internal correspondence;
• an invoice was corrected but the old figure remained in the running total;
• one claim had not in fact been paid yet; or
• the adviser’s summary confused the refund amount with the fee amount.

Until that reconciliation is completed, a taxpayer should be cautious about confirming that every listed claim has been paid exactly as stated.

There is also an important commercial point. A fee invoice from an SDLT refund adviser is a separate matter from HMRC’s legal right to revisit the tax position. Even if the adviser says it would refund its fees if HMRC later successfully challenged the claim, that is a contractual point between adviser and client. It does not affect HMRC’s statutory powers.

Outcome

The practical conclusion is as follows:

• A paid SDLT refund is not automatically under enquiry.
• HMRC can still challenge a repayment if the statutory conditions and time limits allow.
• An unclear HMRC payment reference does not by itself mean the repayment is wrong.
• Before accepting that all claims have been correctly paid, the figures should be reconciled property by property.
• If the refund claim depended on the property being uninhabitable or unsuitable for use, the legal threshold is now relatively high after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Practical Steps

If you are in this position, take these steps:

1. Prepare a schedule for each property showing the claimed refund, any interest, the date submitted, and whether HMRC has confirmed payment.
2. Match each bank receipt from HMRC against that schedule by amount and date, not just by reference.
3. Check whether any invoice, credit note or revised invoice was issued because the wrong property was originally named.
4. Ask for written confirmation if an adviser says HMRC’s note is not an enquiry but only a payment status update.
5. If the legal basis of the claim was that the dwelling was not suitable for use, review the claim carefully in light of Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
6. Do not rely on a rough total. Reconcile each property separately so that your accounting records, tax records and bank records all say the same thing.
7. If HMRC does formally open an enquiry, respond within the stated deadline and gather valuation, survey and transactional evidence immediately.

Conclusion

If HMRC has paid an SDLT refund, that usually means the claim has been processed, not that there is necessarily a live dispute. But payment does not make the matter untouchable. The safest course is to reconcile every figure carefully, confirm whether any formal enquiry has actually been opened, and reassess the strength of the underlying claim if it depended on the property being uninhitable or unsuitable for use.

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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