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Requirements to issue penalties

15 July 2019
Issue: 4704 / Categories: Tax cases
M Harrison and S Ross (FTSTC 5)

The taxpayers bought a property but filed their land and buildings transaction tax return 641 days after the due date. No tax was due. Revenue Scotland imposed late filing penalties. These were the initial £100 fine daily penalties of £900 and £0 for the six and 12-month penalties.

The taxpayers appealed against the daily penalties.

The First-tier Tribunal of Scotland first addressed the £0 penalties for the six and 12-month failure. The judges said there was no explanation of why the penalties had been imposed. Referring to the Upper Tribunal decision in R&J Birkett trading as The Orchards Residential Home and others v CRC [2017] UKUT 89 (TCC) they agreed with judges who said: ‘The assessment of a penalty imposes an obligation to pay the amount assessed. But a purported assessment of a penalty of £0 would impose no obligation to pay would not penalise the taxpayer and would...

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