AN MP today demanded a government inquiry after the Manchester Evening News uncovered an embarrassing postcode blunder by the Inland Revenue.

The mistake led the government to waive thousands of pounds in stamp duty in a well-to-do suburb instead of poor areas of Manchester.

Confused Whitehall mandarins told Manchester estate agents that the M41 postcode area, which includes tree-lined Flixton and Urmston, was officially deprived, even though detached homes there can fetch up to £200,000.

It meant house-buyers could save thousands of pounds, as they would be exempt from stamp duty. The bemused estate agents thought a mistake had been made and asked for clarification.

When the Inland Revenue, which introduced the scheme to encourage development in poorer areas, insisted nothing was amiss, they began to use the new tax break as a selling point.

It is thought officials had confused the M41 postcode with the M14 postcode, which covers Rusholme, Fallowfield and parts of Moss Side. And then they insisted the tax had to be paid despite their error.

Challenge

However, at least one furious house-buyer in Urmston, who was told the one per cent stamp duty would be waived for the sale of any property under £150,000, challenged their ruling and the Manchester Stamp Office had to refund £950.

The Inland Revenue is investigating, but it has refused to say whether it has been forced to pay out to more households.

Nevertheless, estate agents in the area today called on officials to pay up for other house-buyers who purchased properties during the two-month period earlier this year when they were officially exempt.

David Barker, manager at Bridgford's Urmston branch, said: "It gave us a major problem. We were selling houses telling people they wouldn't have to pay stamp duty.

"We lost at least one sale when somebody was told they would have to pay and they pulled out. A lot of people had not budgeted for paying that money."

Stretford and Urmston MP Beverley Hughes demanded an investigation when the M.E.N. told her of the error.

She said: "The Inland Revenue only had to make some local inquiries to find out which were the correct postcodes.

"It seems not only may they have given out public money to people who may not qualify, but they have also led people to enter into expensive house purchases on completely incorrect information.

"I will be asking the minister responsible to investigate as a matter of urgency."

A spokesman for the Inland Revenue said: "Steps have now been taken to ensure the database is interpreted correctly. The Inland Revenue is currently considering how to treat a small number of cases where individuals acted on the information provided by the helpline."

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