RSTP3008 - Penalties for failing to pay tax on time

RSTPA guidance on the penalties a person may be liable to for failing (or continuing to fail) to pay an amount of tax on or before the due payment date.

If you fail to pay an amount of tax mentioned in column 3 of the table further below on or before the date mentioned in column 5 of the table, you are liable to a penalty for failing to pay tax.

If your failure continues, or within a certain period you fail to make another payment in relation to the same tax, you are liable to further penalties (which depending on the circumstances may be fixed or tax-geared / percentage-calculated) of an amount which depends on either how long the failure has continued for, or how many other failures to make a payment in relation to the same tax there have been.

For further guidance on the different types and amounts of LBTT penalties for failing to pay tax see RSTP3009.

For further guidance on the different types and amounts of SLfT penalties for failing to pay tax see RSTP3010.

 

You are not liable to any penalty for failing to pay tax if you satisfy us or (on appeal) the tribunal that there is a reasonable excuse for that failure. See RSTP3022 for guidance on what may, and may not, constitute a reasonable excuse.

Irrespective of whether any penalty (or penalties) is (or are) imposed on you for failing to pay tax, you remain liable to pay the tax in question. We will apply interest on any unpaid tax from the date on which it was due to be paid, until you have paid it (see RSTP4002 and column 4 of the table further below).

RSTPA 2014 section 168

RSTPA 2014 section 178

Amounts of tax to which these penalties relate

The table below, based on the one in section 168(1) of the RSTPA 2014, describes the different amounts of tax to which the penalties for failing to pay tax apply. Column 2 covers the tax to which the payment relates. Column 3 contains the legislative references under which each of the different amounts might be payable. Column 4 provides, for ease of reference, the ‘date by which the amount must be paid’ definitions in relation to the respective column 5 references. Column 5 provides the dates after which a penalty for failing to pay tax is incurred.

  Tax to which payment relates Amount of tax payable The date by which the amount must be paid Date after which penalty incurred
1 Land and Buildings Transaction Tax (a) Amount payable under section 40 of the LBTT(S)A 2013. (a) ‘the tax or additional

tax payable must be paid at the same time as the return is made’ – section 40(2) of the LBTT(S)A 2013

 
(a) The date falling 30 days after the date by which the amount must be paid.
2 Scottish Landfill Tax

(a) Amount payable under regulations made under section 25 of the LT(S)A 2014.

(a) ‘Where a return is to be made under regulation 10, the tax or additional tax payable must be paid to Revenue Scotland at the same time as the return is made.’ – regulation 11(1) of The Scottish Landfill Tax (Administration) Regulations 2015 (a) The date by which the amount of tax payable must be paid.
3 All devolved taxes

b) Additional amount payable as a result of an adjustment under section 66 of the RSTPA 2014.

 

(c) Additional amount payable as a result of an amendment under section 83 of the RSTPA 2014.

 

 

 

 

 

 

 

 

 

(d) Additional amount payable as a result of an amendment under section 87 of the RSTPA 2014.

 

 

 

(e) Additional amount payable as a result of an amendment under section 93 of the RSTPA 2014.

 

 

 

(f) Amount assessed under section 95 of the RSTPA 2014 in the absence of a return.

 

 

 

(g) Amount payable as a result of an assessment under section 98 of the RSTPA 2014.

(b) ‘the end of the period of 30 days beginning with the date on which the notice is issued’ – section 70(2) of the RSTPA 2014

 

(c) LBTT amendments: ‘Tax payable as a result of the amendment of a return must be paid at the same time as the amendment is made.’ – section 40(3) of the LBTT(S)A 2014

SLfT amendments: ‘Tax payable as a result of the amendment of a return must be paid at the same time as the amendment is made.’ – regulation 11(2) of The Scottish Landfill Tax (Administration) Regulations 2015

 

 

 

(d) ‘The taxpayer must pay any amount, or additional amount, of tax chargeable as a result of an amendment under this section immediately on receipt of notice of the amendment.’ – section 87(4) of the RSTPA 2014

 

(e) ‘The taxpayer must pay any amount, or additional amount, of tax chargeable as a result of an amendment made by a closure notice before the end of the period of 30 days beginning with the day on which the notice is given.’ – section 93(6) of the RSTPA 2014

 

(f) ‘P must pay the tax chargeable as a result of the determination immediately on receipt of notice of the determination. – section 95(5) of the RSTPA 2014

 

 

(g) ‘must be paid before the end of the period of 30 days beginning with the date on which the assessment is issued.’ - section 105(3)of the RSTPA 2014

(b), (c), (e) and (g) The date by which the amount must be paid.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d) and (f) The date falling 30 days after the date by which the amount must be paid.

Circumstances under which penalties in relation to failing to pay tax can be reduced

If you incur another penalty (‘penalty 2’) whose amount is determined by reference to the same liability to tax (other than a penalty for failing to make a return on time, see RSTP3005, a penalty for failing to pay tax specified in the table above or a penalty for failing to comply with a relevant requirement under section 22 or 23 of the LT(S)A 2014, see RSTP3019), the amount of any penalty for failing to pay tax (‘penalty 1’) is reduced by the amount of this other penalty.

In other words, no reduction to penalty 1 occurs under this rule where penalty 2 is a fixed or ‘up to’ amount. Reduction to penalty 1 only occurs where penalty 2 is calculated as a proportion or a percentage of the same tax liability as penalty 1 and penalty 2 is not a penalty for failing to make a return on time, for failing to pay tax or a penalty for failing to comply with a relevant requirement.

There are only three types of penalty in relation to the devolved taxes which would invoke this rule:

  • inaccuracy in a taxpayer document attributable to the taxpayer (see RSTP3011);
  • inaccuracy in a taxpayer document attributable to another person (see RSTP3012); and
  • failing to notify us about an under-determination or under-assessment of tax in a Revenue Scotland determination or assessment (see RSTP3013).

RSTPA 2014 section 174

We may also reduce the amount of a penalty for failing to pay tax if we think it is right to do so because of special circumstances (see RSTP3023).

RSTPA 2014 section 177

Suspending a penalty in relation to failing to pay tax

If:

  • you fail to pay an amount of tax when it becomes due and payable (see column 4 of the table above); and
  • you make a request to us for the payment of the amount of tax to be deferred,

we will consider that request.

If we agree to the payment of that amount being deferred for a period (‘the deferral period’), an agreement to that effect is entered into between you and us. If the agreement is varied at any time by a further agreement, the rules below apply from that time to the agreement as varied.   

 

Between the date on which you made the request for deferral and the end of the deferral period you are not liable to any penalty for failing to pay tax.

But if you break the agreement by:

  • failing to pay the amount of tax in question when the deferral period ends; or
  • failing to comply with a condition which the deferral is subject to (including a condition that part of the amount be paid during the deferral period),

then we will serve you with a notice specifying any penalty (or penalties) to which you would have become liable if it had not been for the deferral. You then become liable to the penalty (or penalties) on the date of the notice (as well as any interest on the unpaid tax accumulated during the period of deferral).

RSTPA 2014 section 176

Assessing and paying the penalty

We must make an assessment and notify you of your liability to any penalty for failing to pay tax (stating the transaction or period against which the penalty has been assessed) on or before the later of:

  • the last day of the period of 2 years beginning with the last day on which payment could have been made without paying a penalty (see column 5 of the table above), and (where it applies); and
  • the end of the ‘appeal period’ (see below) for the assessment of the amount of tax against which the penalty has been assessed or, if there is no such assessment, the date on which that amount of tax is ascertained.

The ‘appeal period’ is the period during which an appeal could be brought (see RSTP6008), or the period during which an appeal that has been brought has not been determined or withdrawn.

Subject to the above time limit, we can make a supplementary assessment of your liability to the penalty if an earlier assessment we made was calculated against an underestimate of the amount of tax which you owed. If the assessment of the penalty was based on an amount of tax owed that we later find to have been excessive, we can amend the assessment by notifying you so that it is based on the correct amount.

We can combine an assessment (or a supplementary or amended assessment) of the penalty with any assessment we make in relation to your tax liability (such as a Revenue Scotland assessment - see RSTP1008).

You must pay the penalty no later than 30 days from the date on which we issued the notice of the penalty to you.

We will charge interest on the amount of any unpaid penalty from the date on which the penalty is due to be paid until you pay it (see RSTP4003).

Any penalty for failing to pay tax is treated for enforcement purposes (see RSTP5001) as an assessment to tax. This means that we have the same debt enforcement and recovery powers in relation to this penalty (and other penalties) as we have in relation to tax.

RSTPA 2014 sections 179 and 180

Ref ID: 
RSTP3008
Archive Date: 
15 March 2015
Last updated: 
15 March 2015
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