William G Anderson v Revenue Scotland [2016] TTFT 1 and Classical Land and Property Limited v Revenue Scotland [2016] TTFT 2 are the first two decisions of the First-Tier Tax Tribunal for Scotland: both concerning penalties for late filing of Land and Buildings Transaction Tax (LBTT) returns.
In William G Anderson v Revenue Scotland [2016] TTFT 1 the Tribunal upheld a £100 penalty for filing a nil return 68 days late:
- The penalty was not disproportionate.
- There was no reasonable excuse for late filing. LBTT may be a new tax however ignorance of the law is not an excuse.
- The taxpayer did not take reasonable care: they had not engaged a solicitor and had instead relied on their accountants and the other side’s solicitors.
In Classical Land and Property Limited v Revenue Scotland [2016] TTFT 2 the Tribunal overturned an initial penalty of £100 and a further penalty of £900 for filing a nil LBTT return over 3 months late on procedural grounds. It found:
- The taxpayer did not have a reasonable excuse : they had relied on their solicitors, who had prepared the return but they had not filed it as they were distracted with other problems relating to the transaction.
- There were no grounds to reduce the penalty: although the solicitors had problems with the transaction these did not affect completion of the return.
- The penalty was incorrectly issued and it was therefore overturned. Revenue Scotland had not complied with their statutory obligations: on conclusion of their review they had sent a notice to the taxpayer’s agent but not the taxpayer itself.
In both cases the Tribunal observed that the fact the returns were nil returns wasn’t relevant. The law requires a return in order to allow Revenue Scotland to check whether the LBTT liability has been calculated correctly.
Links
Our subscriber guide: Land and Buildings Transaction Tax (LBTT)
Case references:
William G Anderson v Revenue Scotland [2016] TTFT 1
Classical Land and Property Limited v Revenue Scotland [2016] TTFT 2
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