In Foodwood Limited v Revenue Scotland [2020],  the First Tier Tribunal (FTT) for Scotland Tax Chamber was held that a reasonable excuse against a £100 penalty does not include relying on a reminder from Revenue Scotland to submit a three-year LBTT Lease Review Return (LBTT return). 

  • The company’s solicitor submitted an LBTT return in respect of the original transaction relating to business premises based in Killearn. At the time the registered address was in Glasgow.
  • The three-year LBTT return was due for filing on 31 July 2019 but submitted 27 days later. The registered address was now an address in Buchlyvie.
  • Revenue Scotland issued a £100 late filing penalty on 15 August 2019.
  • The company appealed the penalty on the grounds that they had not received any requests for the LBTT return to be submitted prior to the penalty notice issued.
  • At the time of the appeal to tribunal, the penalty remained unpaid.

The dispute:

  • The LBTT return reminder sent by Revenue Scotland was never received by the company as the tax office had the wrong business name and address. The reminder letters had been returned undeliverable.
  • Revenue Scotland finally issued the penalty to the correct registered address.
  • Revenue Scotland should have had access to the correct address as both Companies House and HMRC had been updated of the change of address in 2016.
  • The penalty was too high and could not be justified and imposed a burden on their cash flow.
  • Revenue Scotland consider the penalty was correctly applied based on the late submission of the LBTT return and the grounds of appeal do not justify a reduction of the penalty on grounds of either special circumstances or reasonable excuse.

The First Tier Tribunal (FTT) Scotland determined:

  • That Revenue Scotland had correctly imposed the penalty for the correct amount.
  • Revenue Scotland is under no obligation to issue reminder letters because the LBTT is a self-assessment system.
  • The company should have updated Revenue Scotland of their new address.
  • In terms of the penalty regime, it found that the aim of such a penalty scheme is legitimate even where no tax is due.

The FTT found:

  • A reasonable taxpayer should at the very least be expected to take reasonable steps to ascertain what their tax obligations are.
  • It was found that the company did not have a reasonable excuse or special circumstances.
  • The appeal against the penalty of £100 was dismissed.


Land and Buildings Transaction Tax
What are the rates for LBTT?

How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What are the recent cases on this topic?

Grounds for appeal toolkit
What grounds are there to appeal a tax penalty? How can you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse?

External links

Foodwood Limited v Revenue Scotland [2020] FTS/TC/AP/19/0027