Conveyancing solicitors are being pressured to become involved in stamp duty land tax (SDLT) avoidance schemes that cost the public purse around £35m, the Gazette has learned.

To protect solicitors and help them challenge requests from clients or third parties to become involved in such schemes, the Law Society has drawn attention to a guidance note from HM Revenue & Customs, outlining a number of ineffective schemes.

The note also makes plain that HMRC will ‘relentlessly pursue’ those who deliberately bend or break the rules, including seeking penalties where appropriate.

Following a recent increase in SDLT avoidance schemes attempting to exploit potential loopholes in the rules, HMRC conducted an exercise to determine the scale of the problem. It compared data held by the Land Registry with SDLT returns, which revealed that through the use of such schemes, about 1,200 people have not paid the right amount of tax due on their property transactions.

HMRC is sending new tax assessments to the 1,200 individuals it has identified as having paid insufficient tax.

An HMRC spokesman said: ‘We have identified 1,200 cases where marketed avoidance schemes have been employed to artificially reduce stamp duty land tax due on property transactions.

‘Left unchallenged, these schemes would potentially deny the country some £35m in vital tax revenues, while giving those who used the schemes an unfair financial advantage over the majority of property purchasers who play by the rules.’

Warren Gordon, a member of the Law Society’s conveyancing and land law committee, said: ‘There was a general feeling that practitioners have been pressured by third parties and clients to become involved in schemes that they felt were not legitimate, otherwise they may lose the conveyancing work.

‘Many have felt that they did not have the ammunition to challenge the requests. They will now be able to point to this guidance to show that HMRC has given notice that the schemes do not work and will be challenged by them, and those seeking to bend the rules will be pursued and may have to pay penalties.’

Warren added: ‘The note is there to help protect solicitors who feel pressured to become involved in the schemes.’

Here is the guidance on stamp duty land tax avoidance schemes.