Enforcement Options

Revenue Scotland will use its statutory powers to manage and collect the devolved taxes using a variety of measures.

Assistance

Revenue Scotland will aim to provide as much assistance as is reasonably practicable to assist taxpayers who are struggling to comply for whatever reason.

Where Revenue Scotland has identified a risk of non-compliance, it may take preventative action by issuing targeted communications to taxpayers and/or their agents.

Monitoring

Revenue Scotland will use a variety of monitoring methods including proactive inspections and investigation of complaints. Where people come forward to make a disclosure and clear up tax liabilities, Revenue Scotland will offer timely help and support to ensure they remain compliant. Those who do not make a full voluntary disclosure and are investigated and receive a civil penalty for deliberate non-compliance will be subject to greater scrutiny from Revenue Scotland.

Statutory Powers – gathering information

Returns, enquiries and determinations

Revenue Scotland (directly or via its delegates) operates the devolved taxes based on self-assessments completed by the taxpayer. Tax will be due and payable on the basis of these self-assessments.

Revenue Scotland has the power to carry out enquiries in relation to taxpayer returns where there is a question as to whether the relevant person is liable to pay tax or about the amount of tax that is chargeable.

Upon carrying out an enquiry, if we form the view that: a) the amount of tax payable in the self-assessment is insufficient; and b) is likely to be lost unless the assessment is immediately amended, we may issue an amended assessment to the taxpayer making good the deficiency.



Where Revenue Scotland has reason to believe that a person should have paid tax but failed to provide a return, and it is within five years of the date when the return should have been provided, it can issue a determination of the tax owed to the person in question. Such a determination is treated in the same way for enforcement purposes as if it were a self-assessment made by the person.



Use of these enquiry and determination powers will be subject to appropriate internal governance arrangements.

Dispute Resolution

In the event that there is a difference in the interpretation of the legislation and Guidance between Revenue Scotland and the taxpayer, there are various dispute resolution channels available to resolving the issue.

Formal requests for information

If Revenue Scotland suspects non-compliance, an officer may write to a taxpayer, their agent or any other relevant person requesting they provide relevant information or documents in a manner as specified in the notice

information notices

An officer of Revenue Scotland or the staff of bodies to which relevant powers have been delegated, will be able to issue the following:

  • an information notice requiring a taxpayer to provide information or documents considered necessary to check that the taxpayer has paid the correct amount of tax;
  • an information notice requiring a third party to provide information or documents considered necessary to check the tax position of a specified taxpayer; or
  • an information notice requiring a third party to provide information or documents considered necessary to confirm the identity of a taxpayer whose identity cannot be ascertained otherwise.

Failure to provide the information or providing false or misleading information may lead to civil penalties and /or criminal prosecution.

Inspection powers

Revenue Scotland may use its inspection powers (s141-149 of the RSTPA) during the course of an investigation to enter business premises and inspect the premises, business assets on the premises and business documents that are on the premises to obtain information in order to ensure compliance with the legal requirements.

Revenue Scotland may also use its investigatory powers to copy and remove paper and computer records.

Failure to comply or obstruct an inspection may lead to civil penalties and/or criminal prosecution.

Civil Penalties

There are a number of reasons that a civil penalty notice may be served. These include:

  • Failure to register for tax
  • Failure to make a return
  • Failure to pay tax
  • A deliberate inaccuracy or careless inaccuracy in a taxpayer document which leads to an understatement of a tax liability; a false or inflated statement of a loss, exemption or relief; a false claim for relief or repayment of tax.
  • Failure to comply with an information notice or deliberate obstruction of an investigation.
  • In complying with an information notice, a person carelessly or deliberately provides inaccurate information and fails to take reasonable steps to inform Revenue Scotland of that inaccuracy.
  • Concealing, destroying or otherwise disposing of (or arranging for the concealment, destruction or disposal of) information that is subject of, or the likely subject of, an information notice.
  • Failure to comply with time limits

In respect of SLfT only:

  • Failure to comply with requirements regarding the weighing of waste

If a landfill operator fails to weigh material in accordance with:

  • the weigh-bridge requirements set out in SLfT2008;
  • an alternative method of weighing waste which you have agreed with Revenue Scotland (see SLfT2009); or
  • any authorisation which you have with Revenue Scotland, and any agreement we have with the relevant waste producer, regarding the discount of the water content of waste,

and then makes a SLfT return to Revenue Scotland in respect of the disposal of that material, then as a consequence:

  • there is deemed to be potential lost revenue (see RSTP3014); and
  • any statement in that SLfT return regarding the weight of the material is deemed to be a deliberate inaccuracy under section 182 of the RSTPA 2014, for which you will be liable to a penalty under that section (see RSTP3011).

These civil penalties can consist of a fixed amount, daily penalties, percentage-based penalties where the penalty is linked to the potential loss in tax revenues, or a combination of all of these. There can also be interest charged on unpaid tax and on penalties.



If the taxpayer fails to pay a civil penalty and remedy the breach, in certain circumstances, Revenue Scotland may consider further action in relation to non-compliance which ultimately may lead to criminal prosecution.



Application of civil penalties will be subject to appropriate internal governance arrangements.

Court action

Civil action

Revenue Scotland is responsible for the issue and collection of civil penalties. We will seek to recover full payment in a prescribed timeframe. If the payment is not made, we may take civil court action if necessary by applying to the sheriff for a summary warrant.

Criminal prosecution

We may seek criminal prosecution if it is deemed as appropriate, as in the case of fraudulent non-compliance. The decision whether to bring a criminal prosecution is made by the independent prosecuting authority COPFS. In particular, COPFS will consider whether there is a reasonable prospect of a conviction and any other relevant factors which may preclude a successful conviction.

The Proceeds of Crime Act 2002

POCA permits COPFS to consider, during the course of a criminal investigation, whether the public interest is served by restraining the assets of a suspected offender and seeking confiscation, if a conviction is secured against that person. We will exercise this power in appropriate cases, subject to appropriate governance procedures.

Civil recovery

Civil recovery may be employed in some cases, to recover the proceeds of crime, instead of, or in addition to a criminal prosecution. POCA grants COPFS non-conviction asset seizing powers to recover funds and items to stop them being reinvested into further criminal activity.

Last updated: 
21 March 2015
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