In Michael Robert Harrison and Sharon Ross v Revenue Scotland [2019] FTSTC 5 the Scottish tribunal again allowed an appeal against daily penalties for late filed LBTT returns; the law on penalties was not complied with.

A Scottish Land and Building Transaction Tax (LBTT) return must be made before the end of 30 days beginning with the day after the effective date of the transaction.

  • If a return is more than 3 months late, daily penalties of £10 per day may be charged if Revenue Scotland so decides and if they give notice specifying the date from which the penalty is payable. (s161 Land and Buildings Transaction Tax (Scotland) Act 2013).

The taxpayers purchased their premises for £50,000 and no LBTT was due.

  • They were sent an LBTT return to sign by their agent but failed to return it. On selling the property 18 months later the omission was discovered and the return filed, 641 days late.
  • Revenue Scotland issued a £100 late filing penalty and maximum daily penalties of £900. The taxpayers appealed the daily penalties but not the £100 penalty.
  • The penalty notice also include £0 for 6 and 12 month failure to make a return.

The Scottish FTT allowed the appeal and cancelled the daily penalties:

  • In dealing first with the £0 penalties, the tribunal said it had “a problem” with them and that they should not be stated as being penalties of £0. They therefore cancelled the £0 penalties.
  • As to the daily penalties the judges concurred with their decision in the simultaneously heard case of Begbies Traynor (Central) LLP v Revenue Scotland [2019] FTSTC 4 stating that s161 had not been complied with:
    • there was no decision by Revenue Scotland to charge the penalties and
    • no warning notice had been sent.

Links to our guides:

LBTT: Land and Buildings Transaction Tax (LBTT)

How to appeal a tax penalty

External link:

Michael Robert Harrison and Sharon Ross v Revenue Scotland [2019] FTSTC 5  

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