Revenue Scotland and Tax Powers Act 2014 section 177

Special reduction in penalty under Chapter 2

Section 177 gives Revenue Scotland the discretion to reduce penalties imposed under Chapter 2 where special circumstances exist, and defines what does and does not count as special circumstances for this purpose.

• Revenue Scotland may reduce a Chapter 2 penalty where it considers special circumstances justify doing so, but a taxpayer's inability to pay or the offsetting of one taxpayer's underpayment against another's overpayment do not count as special circumstances.
• A "reduction" in penalty is broadly defined and includes cancelling the penalty entirely, suspending it, or reaching a compromise agreement in penalty proceedings.
• Any reference to a penalty in this section also covers any interest that has accrued on that penalty, so the reduction power extends to associated interest as well.
• Revenue Scotland retains the power to apply a special reduction even after a tribunal or court has already made a decision about the penalty in question.