Breaking New Ground? Developing a Scottish tax to replace the UK Aggregates Levy: consultation

Chapter 10: Penalties

10.1 It is important that the system for Scotland's devolved taxes operates fairly and efficiently. The Scottish Government recognises that the vast majority of taxpayers want to comply with their obligations.

10.2 To encourage compliance and deter non-compliance, a range of fixed, daily and tax-geared (or percentage-calculated) civil penalties apply to the devolved taxes. Revenue Scotland has the power in certain circumstances, and for certain penalties, to suspend, reduce or even waive a penalty. The Revenue Scotland website provides guidance on the penalty system for the devolved taxes.

10.3 The Scottish Government proposes to adopt the penalty framework provided for in the RSTPA 2014 (see further below), with minor modifications to some penalty provisions to ensure they also cover a devolved tax on aggregates. This will ensure that the civil penalty system for a Scottish replacement to the UK Aggregates Levy is consistent with the other devolved taxes.

Current devolved tax penalties

10.4 The following table outlines the current devolved tax penalties which it is proposed will also apply to a Scottish replacement to the UK Aggregates Levy.

• Failure to keep and preserve records in relation to tax returns and tax registration requirements.
• Obstructing or failing to comply with a requirement to allow a designated officer access to, or inspection of, a computer or associated apparatus.
• Failure to submit a tax return on time.
• Failure to pay tax on or before the filing date.
• Submitting a tax return or claim which contains an error that is "careless‟ or "deliberate‟ and which either: a) understates the tax liability, b) provides a false/inflated statement of loss/exemption/relief or c) provides a false/inflated claim for relief to or repayment of tax.
• Submitting a tax return or claim which contains an error that is attributable to another person either deliberately supplying false information to, or withholding information from, the person who provides the document, and which either: a) understates the tax liability, b) provides a false/inflated statement of loss/exemption/relief or c) provides a false/inflated claim for relief to or repayment of tax.
• Failure to take reasonable steps to notify the tax authority about a Revenue Scotland under-assessment of tax within specified time period of the assessment date.
• Failure to comply with an information notice or deliberately obstructing the carrying out of an inspection or the exercising of certain powers approved by the Tax Chamber of the First-tier Tribunal for Scotland.
• Continued failure to comply with an information notice or continued obstruction of an inspection or exercising of certain Tax Chamber of the First-tier Tribunal for Scotland approved powers after a penalty under section 195 has been imposed.
• Providing inaccurate information or documents when complying with an information notice.
• Breaching an obligation contained in regulations made under section 111 of the Revenue Scotland and Tax Powers Act (Reimbursement Arrangements) Regulations 2015. These regulations are intended to prevent a taxpayer being reimbursed or repaid tax where it would unjustly enrich them.
• Increased daily penalty for continued failure to comply with an information notice issued to a person to obtain information or documents about another person (or class of persons) whose identity is unknown to the investigating officer.
• Tax-related penalty (of an amount determined by the Upper Tribunal for Scotland) for continued failure to comply with an information notice or obstruction of an inspection and where it is felt that, as a consequence of such behaviour, the tax paid by the person (or which is likely to be paid) is significantly less than it would have been.
• Failure of the taxpayer to register or de-register for tax.
• Failure to comply with a notice to supply the contact details of a debtor.

Questions

B17 – Do you agree the list of civil penalties set out above should apply in relation to a devolved tax on aggregates?

If you answered no, please explain your answer.

B18 – Are there any other civil penalties that should be considered?