Leading risk and compliance consultancy Legal Eye, has been assisting firms across England and Wales…
The website Legal Futures reports on a disturbing case involving a fee earner and Stamp Duty ‘errors’ which were entirely intentional on her part. https://www.legalfutures.co.uk/latest-news/conveyancing-fee-earner-banned-over-338000-tax-scam
Sarah Tyler, of firm Hek Jones, operated a fairly elaborate scheme of deception, requesting the correct amount of SDLT from her clients and then completing Returns which were knowingly incorrect and showed lower amounts.
Having done this, she would then inform her accounts department that the ‘excess’ money was a referral payment. They would pay it, at her direction, to one of a number of individuals. She would then contact those individuals on the pretence of advising that they had received the payments in error and should return them, giving them her personal bank details to do so.
We all like to trust our colleagues, co-workers and employees and assume they are as honest as we are. Certainly, the legal profession feels like one which should, per the SRA’s own rules, strive to maintain the trust of the public at large, and yet the unfortunate truth must be faced that just as accidental errors are only too possible when it comes to the complex and ever-shifting sands of SDLT legislation, deliberate wrongdoing may also occur.
Over the 20 years since SDLT was introduced there have been several instances of client SDLT monies being stolen by nefarious means, usually with criminal consequences for the individual and massive damage to the firm and its reputation. In some cases Firms were forced to close as a result.
Happily, using Compass ensures that these kinds of acts are simply not possible as all calculations are “locked” by the system once consideration has been entered and tax due generated, and complex matters will receive independent oversight as and when required. The direct submission of the Return from the system to HMRC ensures that no-one can alter a completed calculation and divert funds to themselves. The management screens also allow supervisors and COLPS to monitor activity and spot potentially problematic issues, preventing fee earners like Ms Tyler from indulging in “creative accounting” as was done in this case.
This ensures that your firm’s reputation remains unblemished, while still making the lives of your fee earners and their staff easier.
At present, 93 out of 100 cases follow this automated process, with Compass’ algorithm now advanced enough to perform automatic, indemnified calculations on all but the most extreme complicated scenarios.
Looking to the future, our tech team is currently working on an AI algorithm which will, compare the data entered to data held online about similar local transactions, and flagging up potential anomalies where spotted.
This will mean that every matter – even those standard ones which Compass is able to calculate automatically – will be protected from these kinds of deceptions.
You might call it Artificial Intelligence. We prefer to think of it as “Absolute Investment” – in ensuring that your firm is always protected to the best of our abilities.