{"id":9389,"date":"2023-03-13T08:00:00","date_gmt":"2023-03-13T08:00:00","guid":{"rendered":"https:\/\/www.taxpolicy.org.uk\/?p=9389"},"modified":"2023-03-13T09:40:04","modified_gmt":"2023-03-13T09:40:04","slug":"abolishstamp","status":"publish","type":"post","link":"https:\/\/heacham.neidles.com\/2023\/03\/13\/abolishstamp\/","title":{"rendered":"The stupidest tax: complicated, costs businesses \u00a3m, and raises zero money. Let’s abolish stamp duty."},"content":{"rendered":"\n

Stamp duty was one of the triggers for the American Revolution. Somehow, 250 years later, we still have it. That makes no sense – it raises no money, is pointlessly complex,<\/em><\/strong> and creates cost and uncertainty for business. The Government should abolish it<\/em>.<\/strong><\/p>\n\n\n\n

250 years ago, stamp duty made perfect sense. The State had limited power and resources, and collecting tax from people was hard. So some unknown genius had a brilliant idea. Impose a special duty on documents. No need to have an army of tax inspectors. But if you wanted the document to be used for any kind of official purpose, you’d have to pay to get it stamped. No official would accept an unstamped document, for fear of being thrown into jail. Beautiful simplicity – a tax that doesn’t need an enforcement agency.<\/p>\n\n\n\n

Stamp duty once applied to basically everything. Even tea1<\/a><\/sup>Technically this was the Townshend Act not the Stamp Act, but facts shouldn’t get in the way of a good engraving<\/span> \u2013 which helped spark the American Revolution. Over time, it’s shrunk and shrunk, and today it’s basically irrelevant. But still there, and still costing business millions in legal fees. <\/p>\n\n\n\n

At this point I should clarify that I’m talking about old-style stamp duty, the one that actually involves things being stamped2<\/a><\/sup>Post-pandemic, it’s an electronic stamping rather than physical stamping<\/a> – HMRC retired their beautiful<\/a> old stamping machines.<\/span>. I’m not talking about the two modern taxes that emerged from stamp duty, but work in a sensible modern way:3<\/a><\/sup>By which I mean that, whilst not great<\/a> taxes<\/a> from a policy standpoint, they technically\/practically work just fine. They were created because stamp duty just became too old, creaking, and easily avoided. They are “normal” taxes in that if you don’t pay them, you go to jail (maybe<\/a>).<\/span> stamp duty reserve tax (SDRT – which applies to shares), and stamp duty land tax (SDLT). Both are often referred to as “stamp duty”, but they are separate taxes.<\/p>\n\n\n

What does old-style stamp duty actually cover?<\/h2>\n\n\n

Given SDRT applies to securities, and SDLT applies to land, what does stamp duty do?<\/p>\n\n\n\n

Answering that question is surprisingly hard, and requires a level of nerdy detail not really suitable for a blog post or twitter thread. But it demonstrates the insanity of the tax, so I’ll do it anyway: <\/p>\n\n\n\n