Revenue Scotland and Tax Powers Act 2014 section 118

Contract settlements

Section 118 explains how overpaid tax claims work when an amount was paid under a contract settlement, particularly where the person who made the payment is not the same person as the taxpayer who owed the tax.

• An amount paid under a contract settlement in connection with tax believed to be due counts as an amount paid by way of tax for the purposes of overpaid tax claims under sections 107 and 108.
• Where the person who paid under the settlement (the payer) is different from the taxpayer, specific defences available to Revenue Scotland against claims are extended so they apply by reference to the taxpayer as well as or instead of the payer.
• Revenue Scotland may set off any amount repayable to the payer against any amount that becomes payable by the taxpayer as a result of an assessment arising from the same grounds as the claim.
• A contract settlement is defined as an agreement made in connection with any person's liability to make a payment to Revenue Scotland under the Act or any other legislation.