Partly, this is due to the fact that Stamp Duty only applies if the rent payable exceeds the fairly hefty sum of £125,000 (and is subject to allowing for a small "net present value" discount).
The other factor is that Stamp Duty is payable at the rate of 1% on the balance over £125,000, so the tax bill is relatively low. And even when there is a liability to pay Stamp Duty on a lease, a failure to pay does not affect the validity of the lease, though it does give rise to a late payment penalty when payment is made late.
However, there is another aspect to this which should not be overlooked. International companies are now very sensitive to accusations of aggressive tax avoidance. In this climate, an employer does not wish to discover from a journalist that it has been failing to pay tax on its expat leases. The company will not be impressed to learn that its relocation advisers have failed to deal with the tax.
Our recommendation to relocation companies operating in the UK is to carry out routine Stamp Duty audits and to ensure that a Stamp Duty assessment is part of the process of finalising new leases and (particularly) renewals of leases. The financial penalties may be small, but the damage to a client relationship may be considerable.
One other "hidden" tax point to mention is the recent abolition of Stamp Duty in Scotland and its replacement with Land and Buildings Transaction Tax (LBTT). The good news is that LBTT is not payable on residential leases, so the above warnings on Stamp Duty can be ignored for Scottish leases.
The bad news relates to tax on Guaranteed Sale programmes: LBTT does not contain an exemption from tax when the "buy-in" takes place. So these programmes are now far costlier in Scotland than in the rest of the UK.
If you would like advice on relocation tax issues, please contact us on the details below.