As a general rule, if Revenue Scotland is due you money (i.e. you have a credit on your account), but you also owe Revenue Scotland money (i.e. there is also a debit), section 251C allows Revenue Scotland to set-off the credit against the debit before making any repayment.
This set-off power only relates to credits and debits of the same taxpayer but may relate to more than one devolved tax. The set-off power may not be used in an insolvency situation (see further below).
This is in addition to any other capability that Revenue Scotland has to set off credits against debits (for example, under the common law) or any obligation of Revenue Scotland to set the credit against another sum.
Section 251C does not require Revenue Scotland to seek authority from taxpayers before set-off takes place.
We will notify you of what debits the credit has been allocated to. Where a credit is set-off against a debit, this discharges both your obligations and those of Revenue Scotland to the extent of that “set-off.”
When we cannot set-off
It is not possible to make a set-off whilst any debit is still capable of being in dispute. Where the debit can be varied or set aside on Review or Appeal that sum cannot be used for set-off until the relevant time limit has expired or the dispute has been resolved.
Where an insolvency procedure has been applied, Revenue Scotland cannot use the set-off rules to set-off a post-insolvency credit against a pre-insolvency debt on the account. This means that Revenue Scotland will not be advantaged over other creditors in insolvency situations.
RSTPA 2014 section 251D
Sections 251C and 251D came into force on 19/01/2026