About CQS Conveyancing

The SDLT Time Bomb: Are You Outsourcing Your Liability?

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by

Simon Seaton
in

Outsourcing SDLT used to be about efficiency.

In 2026, it might be about exposure.

Between HMRC changes, tightening CQS scrutiny, lender panel wording and sharper PII underwriting, SDLT outsourcing may move from an “operational shortcut” to potential compliance risk.

Here is where conveyancing firms are vulnerable.

1. HMRC: Who Is Actually Giving the Tax Advice?

Recent changes under the Finance Bill 2025–26 have increased scrutiny on paid agents interacting with HMRC.

The uncomfortable question is this:

When your subcontractor calculates reliefs, applies mixed-use treatment, or structures the SDLT position — who is giving the tax advice?

If you file under your firm’s HMRC Agent account, you are owning that advice.

If the third party is not appropriately registered (where required), you may be carrying risk you did not price for and did not supervise.

You can outsource the work.

You cannot outsource the regulatory responsibility.

2. CQS: “We Trust Our Provider” Won’t Save You

CQS requires firms to maintain an internal audit trail and verification procedure.

Copy-pasting a third party’s calculation is not verification.

If a CQS auditor asks:

  • Who checked this?
  • What did they check?
  • Where is it recorded?

You need more than a service agreement.

Outsourcing without documented internal review is not efficiency.

It’s exposure.

3. Lenders: The Personal Instruction Problem

UK Finance Handbook is clear: lender instructions are personal to your firm and must not be sub-contracted without written consent.

Is SDLT “core” to the instruction?

Arguably yes because without SDLT5, the lender’s charge cannot be registered.

Many firms assume this isn’t an issue. Technical breaches don’t matter until there is a claim. If you argue the Handbook was not clear then the court may say ‘you had the opportunity to seek clarification’

4. PII: The Question You Don’t Want at Renewal

PI Insurers are now asking directly about:

  • HMRC agent registration
  • Outsourced SDLT services
  • Third-party tax input

If that arrangement has not been clearly disclosed, you may have a problem especially if there is an issue later.

PII disputes don’t happen at renewal.They happen when you notify a claim.

The Bottom Line

If you are thinking of outsourcing SDLT you should not that it not just an operational decision.

It is also a compliance decision.

If you outsource, you must be able to prove:

  • You remain in control
  • You verify the advice
  • Your lenders are not exposed
  • Your insurer is fully informed

Because when SDLT goes wrong, it doesn’t go wrong for your subcontractor.

It goes wrong for you.