What penalty rates apply for repeated failures to pay Scottish landfill tax under section 171?

Under section 171 of the Revenue Scotland and Tax Powers Act 2014, escalating penalty rates apply during an existing penalty period. The first default attracts a 2% penalty on the unpaid amount, the second default incurs 3%, and the third and every subsequent default is penalised at 4% of the unpaid amount.

How does the penalty period extend when further defaults occur under RSTPA 2014 section 171?

Each new default within the penalty period extends it so that it ends 12 months after the due date for the latest missed payment. This means the penalty period can be extended repeatedly if the person continues to default, keeping them within the escalating penalties regime for as long as failures persist.

When does section 171 apply instead of the first penalty rules under section 170?

Section 171 applies when a person who has already triggered a penalty period under the first penalty rules in section 170 fails again to pay the same type of Scottish landfill tax before that penalty period ends. The subsequent failure is dealt with under section 171's escalating penalties rather than the first penalty provisions.

Which defaults count towards escalating penalties under section 171?

Only defaults where the payment period to which the tax relates is less than six months are counted for the purpose of calculating escalating penalties under section 171. A default occurs when a person fails to pay an amount of Scottish landfill tax in full by the date it becomes due and payable.

Revenue Scotland and Tax Powers Act 2014 section 171

Scottish landfill tax: penalties for multiple failures to pay tax

Section 171 sets out escalating penalties that apply when a person repeatedly fails to pay Scottish landfill tax on time during an existing penalty period.

When a penalty period is already running due to a first failure to pay, any further failure to pay the same type of tax within that period triggers additional penalties under this section instead of the first penalty rules
Penalty rates escalate with each successive default: 2% of the unpaid amount for the first default in the period, 3% for the second, and 4% for the third and every subsequent default
Each new default extends the penalty period so that it runs until 12 months after the due date for the latest missed payment, and the period can be extended repeatedly
Only defaults relating to payment periods of less than six months count towards the escalating penalty calculation

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