In Ernold Ltd v Revenue Scotland [2018] FTSTC insufficiency of funds was held not be a reasonable excuse for a failure to file a Scottish land and buildings transaction tax return.
Land and Buildings Transactions Tax 'LBTT' is the Scottish equivalent to Stamp Duty Land Tax.
Late filing and payment penaltes are assessed under the Revenue Scotland and Tax Powers Act 2014 (“RSTPA”)
- The company appealed against a penalty of £1,527 for late payment of LBTT.
- It claimed it was late due to insufficient funds. It claimed that the penalty was unfair.
- The company did not contest a late filing penalty of £100
The FTSTC found that:
- The imposition of penalties is rationally connected to the policy objective in that it encourages compliance and the powers to mitigate allow a balance to be struck between the Exchequer and taxpayers.
- It was held that insufficiency of funds is not reasonable excuse for this Scottish tax, just as it is not acceptable for an English tax.
Useful guides
Scottish Land and Buildings Transaction Tax
External link
Ernold Ltd v Revenue Scotland [2018] FTSTC
Case report:
Reasonable excuse: