In 71 Brewing Limited v Revenue Scotland [2024] TFSTC 10, the First Tier Tribunal (FTT) found Revenue Scotland has no obligation to notify taxpayers that a three-year lease review return is required for LBTT purposes.
In yet another Land and Building Transaction Tax (LBTT) three-year lease review return case, 71 Brewing Limited appealed penalties for the late submission of the return because they were unaware that a return was required every three years and Revenue Scotland sent no reminders.
Like other recent cases, 71 Brewing claimed to have received no reminder, making them unaware that a return was due.
Revenue Scotland claimed a reminder was sent to one of the directors. Regardless, the FTT stated that LBTT is a self-assessed tax and Revenue Scotland is under no obligation to send reminders to taxpayers liable for submitting a return.
As with other cases, the FTT considered whether there was a ‘Reasonable excuse’ or ‘special circumstances’ for the late submission of the return.
The FTT found:
- That Revenue Scotland not reminding the taxpayer is not a reasonable excuse.
- Reliance on a third party is only a reasonable excuse if the appellant took reasonable care to avoid any failure, which they did not.
- The original return was on time and ‘simply forgetting to submit a three-year return is not a reasonable excuse’.
They also found there were no circumstances surrounding the late submission of the return that were unusual, uncommon or out of the ordinary and, in accordance with case law, could not be deemed ‘special circumstances’.
71 Brewing Limited believed the penalties to be 'unfair'.
The FTT found that the penalties were not unfair, harsh or excessive given that the return was submitted two years late and Revenue Scotland had issued a reminder.
The FTT also stated that it can only make decisions based on statute, quoting HMRC v Hok [2012], ‘this tribunal does not have the jurisdiction to consider…. fairness’.
The appeal was dismissed.
Useful guides on this topic
LBTT: Land and Buildings Transaction Tax
What is Land and Buildings Transaction Tax (LBTT)? What are the rules?
Scottish LBTT Rates
What are the Land and Buildings Transaction Tax (LBTT) rates?
LBTT: Additional Dwelling Supplement
What is the Additional Dwelling Supplement for the Land and Buildings Transaction Tax? When does it apply?
Grounds for Appeal: Reasonable Excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?
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