Stamp duty - why?

[Dave2002]

I've been thinking for years that Stamp Duty is a bad way of taxing people. I'm not against taxing the better off, but I'm against Stamp Duty as it presents a strong barrier to mobility. Maybe others will disagree. I think the days have long gone when hardly anyone paid Stamp Duty, and the fact that it often increases each time one upgrades is not helpful.

I don't suppose HMG or HMRC really care, but I do think that if Stamp Duty were abolished, or at least reduced very considerably to a flat rate rate or small percentage, then people would be much more inclined to move. This would then have benefits to various parts of the economy which relate to house relocation, and probably also to refurbishing etc., so in terms of stimulating economic activity that could be much more beneficial than the direct revenue to the Exchequer from Stamp Duty, and the government would still get revenue via other routes.

Maybe I'm wrong. If so, argue against me!

[ahinton]

I've been thinking for years that Stamp Duty is a bad way of taxing people. I'm not against taxing the better off, but I'm against Stamp Duty as it presents a strong barrier to mobility. Maybe others will disagree. I think the days have long gone when hardly anyone paid Stamp Duty, and the fact that it often increases each time one upgrades is not helpful.

I don't suppose HMG or HMRC really care, but I do think that if Stamp Duty were abolished, or at least reduced very considerably to a flat rate rate or small percentage, then people would be much more inclined to move. This would then have benefits to various parts of the economy which relate to house relocation, and probably also to refurbishing etc., so in terms of stimulating economic activity that could be much more beneficial than the direct revenue to the Exchequer from Stamp Duty, and the government would still get revenue via other routes.

Maybe I'm wrong. If so, argue against me!

I think that you're right, so I won't. I don't see the point of SDLT (Stamp Duty Land Tax) any more than I can understand for the life of me why it is so called; it makes selling property harder and causes the other problems to which you draw attention.

[AuntyKezia]

I have a vague memory that in the past (1950s?) a receipt for certain kinds of goods, to be official, had to have a stamp affixed to it, for which presumably the buyer had to pay. Was it intended as a kind of primitive sales tax in pre-VAT days, with the revenue accruing to the government? In that case the SDLT would be a kind of hangover from something that used to be applied to many other transactions once upon a time.

[mangerton]

I have a vague memory that in the past (1950s?) a receipt for certain kinds of goods, to be official, had to have a stamp affixed to it, for which presumably the buyer had to pay. Was it intended as a kind of primitive sales tax in pre-VAT days, with the revenue accruing to the government? In that case the SDLT would be a kind of hangover from something that used to be applied to many other transactions once upon a time.

It goes back to the 18th c and was (as you might expect) a Government revenue raising racket, originally intended to be temporary*. Stamp duty was paid on a number of things, including playing cards, strangely enough. Receipts over £2 had to bear a twopenny stamp, cancelled by writing the receipt over the stamp, so actually the seller of the goods paid the stamp duty. A cheque book containing thirty cheques cost five shillings - twopence stamp duty per cheque.

Many of these measures were abolished by the 1964 Finance Act, but some including SDLT remain.

* Income Tax was first levied as a temporary tax to pay for the Napoleonic Wars.

[cloughie]

I have a vague memory that in the past (1950s?) a receipt for certain kinds of goods, to be official, had to have a stamp affixed to it, for which presumably the buyer had to pay. Was it intended as a kind of primitive sales tax in pre-VAT days, with the revenue accruing to the government? In that case the SDLT would be a kind of hangover from something that used to be applied to many other transactions once upon a time.

Yes, A 2d stamp which was orange in colour, but later brown colour if my memory serves - just shows that philately gets you a long way.