A person (‘T’) is liable to a penalty of 100% of the potential lost revenue (see RSTP3014 for a definition of potential lost revenue) where:
- another person (‘P’, which in most cases will be the taxpayer) gives us a document of the kind contained in the table in RSTP3011;
- the document contains an inaccuracy which amounts to, or leads to:
- an understatement of a tax liability;
- a false or inflated statement of a loss, exemption or relief; or
- a false or inflated claim for relief or to repayment to tax;
- and the inaccuracy was attributable to:
- T deliberately supplying false information to P (whether directly or indirectly); or
- T deliberately withholding information from P,
with the intention of the document ultimately containing the inaccuracy.
T is liable to this penalty irrespective of whether or not P is liable to a penalty for giving us the document with the inaccuracy (see RSTP3011).
We may reduce the amount of this penalty if:
- we think it is right to do so because of special circumstances (see RSTP3023); or
- T makes a qualifying disclosure to us to us (see RSTP3024).
Assessing and paying the penalty
We must make an assessment and notify T of his/her liability to this penalty (stating the period against which the penalty has been assessed) within the period of 12 months beginning with:
- the end of the ‘appeal period’ (see below) for our decision which corrects the inaccuracy (such as a decision to make a Revenue Scotland assessment); or
- if there is no such assessment by us to the tax concerned above, the date on which the inaccuracy is corrected.
The ‘appeal period’ is the period during which an appeal could be brought (see RSTP6008), or the period during which an appeal that has been brought has not been determined or withdrawn.
Subject to the above time limit, we can make a supplementary assessment of T’s liability to this penalty if an earlier assessment we made was calculated using an underestimate of the potential lost revenue.
For example, if the document given to us by P contains a relevant inaccuracy attributable to T and we initially assess T as being liable to a penalty for £1,000 (in relation to a potential lost revenue of £1,000), and we later discover that the actual potential lost revenue was £1,500, we can make a supplementary assessment the effect of which is that T is liable to a further penalty of £500 (so that the initial and later penalties total 100% of the actual potential lost revenue, which in this example is £1,500).
T must pay the penalty no later than 30 days from the date on which we issued the notice of the penalty to him/her.
We will charge interest on the amount of any unpaid penalty from the date on which the penalty is due to be paid until T pays it (see RSTP4003).
This penalty is treated for enforcement purposes (see RSTP5001) as an assessment to tax. This means that we have the same debt enforcement and recovery powers in relation to this penalty (and other penalties) as we have in relation to tax.