RSTP4002 - Interest on late payment of tax

RSTPA guidance on the circumstances in which Revenue Scotland can charge interest for late payment of tax.

RSTP4002 - Interest on late payment of tax

We will charge you interest on any amount of unpaid tax* from the relevant date (see further information below) until you pay it.

The percentage per annum interest rate we charge for late payment of tax is the Bank of England rate (currently 0.5%) + 2.5%. We therefore currently charge 3.00% per annum interest on any amount of unpaid tax.

The interest charged is simple interest, not compound interest. This means that late payment interest is only calculated on the amount of unpaid tax and not also on late payment interest that has already been charged or accrued.

*‘Unpaid tax’ means an amount of tax which you have not paid to us by the due date.  If you lodge a sum of money with us in respect of the tax payable on a transaction, the amount of tax on which you will be charged interest is reduced by the sum lodged. This includes you making a partial late payment of tax following an initial underpayment. For example, if your tax liability is £1000 but you have only paid us £800 by the due date, we will charge you interest on the £200 of unpaid tax until such time as you pay us the £200.

Meaning of ‘relevant date’

The ‘relevant date’ for the purposes of interest on late payment of tax is:

  • the date specified in column 3 of the table below; unless
  • the taxpayer has died before the amount becomes due and payable, and the executor of the deceased taxpayer is unable to pay us the amount before obtaining a grant of confirmation. In this case, the relevant date is the later of:
    • the date which would have been the relevant date had the taxpayer not died (see the table below); and
    • the day after the end of the period of 30 days beginning with the grant of confirmation.
  Tax to which unpaid tax relates ‘Relevant date’

All references below to the ‘filing date’ mean the date by which the tax return relating to the unpaid tax was required to have been made to us (see section 82 of the RSTPA 2014 or column 4 of the table in RSTP3005)

 
1 All devolved taxes (a) in relation to an amount, or additional amount, payable following an adjustment made under section 66(1) of the RSTPA 2014 (see RSTP8006) as a result of counteraction taken by us in respect of an artificial tax avoidance arrangement, the filing date for the return or, if there is no return, the filing date of the return that would have been required to have been made, had that tax avoidance arrangement not been entered into or carried out;

(b) in relation to an amount, or additional amount, payable following a taxpayer amendment of a return under section 83 of the RSTPA 2014 (see RSTP1002), the filing date for that return;

(c) in relation to an amount, or additional amount, payable following a Revenue Scotland correction of a return under section 84 of the RSTPA 2014 (see RSTP1009), the filing date for that return;

(d) in relation to an amount, or additional amount, payable following a Revenue Scotland amendment of a return under section 87 of the RSTPA 2014 (see RSTP1004), the filing date for that return;

(e) in relation to an amount, or additional amount, payable following a Revenue Scotland amendment of a return made in a closure notice (at the completion of an enquiry) under section 93 of the RSTPA 2014 (see RSTP1006), the filing date for that return; 

(f) in relation to an amount payable following a Revenue Scotland determination of no return made under section 95 of the RSTPA 2014 (see RSTP1007), the relevant filing date of the return as defined in section 95(2) of that Act;

(g) in relation to an amount, or additional amount, payable following a Revenue Scotland assessment under section 98 of the RSTPA 2014 (see RSTP1008), the filing date for the return made by the taxpayer where there is a return; otherwise the date when a return should have been made.
2 Land and Buildings Transaction Tax

(a) in the case of an amount payable because relief is withdrawn under—

(i) Part 5 of schedule 4 to the LBTT(S) Act 2013 (relief for certain acquisitions of residential property – see LBTT3013 and LBTT3014);

(ii) Part 5 of schedule 5 to the LBTT(S) Act 2013 (relief for transfer of multiple dwellings – see LBTT3015);

(iii) Part 4 of schedule 8 to the LBTT(S) Act 2013 (relief for alternative property investment bonds - see LBTT3021);

(iv) Part 3 of schedule 10 to the LBTT(S)A 2013 (group relief – see LBTT3025);

(v) Part 3 of Schedule 10A to the LBTT(S) Act 2013 (Note: This is currently draft legislation) (sub-sale development relief - see LBTT3044);

(vi) Part 4 of schedule 11 to the LBTT(S)A 2013 (reconstruction or acquisition relief – see LBTT3029); or

(vii) schedule 13 to the LBTT(S)A 2013 (charities relief – see LBTT3035),

the date 30 days after the date of the disqualifying event, unless there is deferral under section 41 of the LBTT(S) Act 2013, in which case paragraph (b) below applies.

The ‘disqualifying event’ means:

  • in relation to the withdrawal of relief under schedule 4 (relief for certain acquisitions of residential property) to the LBTT(S)A 2013, an event listed in section 33(4)(a) of that Act;
  • in relation to the withdrawal of relief under schedule 5 (relief for transfer of multiple dwellings) to the LBTT(S)A 2013, an event listed in section 33(4)(b) of that Act;
  • in relation to the withdrawal of relief under schedule 8 (relief for alternative finance investment bonds) to the LBTT(S)A 2013, an event listed in section 33(4)(c) of that Act;
  • in relation to the withdrawal of group relief, the buyer ceasing to be a member of the same group as the seller in terms of paragraph 14 of schedule 10 to the LBTT(S)A 2013;
  • in relation to the withdrawal of relief under schedule 10A (sub-sale development relief) to the LBTT(S)A 2013, an event listed in section 33(4)(da) of that Act;
  • in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company in terms of paragraph 13 of schedule 11 to the LBTT(S)A 2013; or
  • in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraphs 5-6 of schedule 13 to the LBTT(S)A 2013.

(b) in the case of a deferred payment under section 41 of the LBTT(S)A 2013 (see LBTT4016), the date when the deferred payment is due;

(c) in a transaction which involves contingent, uncertain or unascertained consideration and where an amount, or additional amount, later becomes payable to us under section 31 (see LBTT4021), the filing date in terms of section 31(3) of that Act;

(d) in the case within sections 18 or 19 of the LBTT(S)A 2013 (contingent or uncertain consideration – see LBTT2005) and where payment is not deferred following an application under section 41 of that Act, the filing date;

(e) for any other return under the LBTT(S)A 2013, the filing date.
3 Scottish Landfill Tax In relation to a return made under regulations made under section 25 of the LT(S)A 2014 (see regulation 10 of The Scottish Landfill Tax (Administration) Regulations 2015), the filing date (see SLfT5002).

RSTPA 2014 sections 217 and 220

The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015 regulations 3-6

Ref ID

RSTP4002

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