Revenue Scotland and Tax Powers Act 2014 section 189

Potential lost revenue: losses

Section 189 explains how to calculate the potential lost revenue when an inaccuracy results in a loss being wrongly recorded for purposes of a devolved tax.

• Where a wrongly recorded loss has been entirely used to reduce a tax liability, the potential lost revenue is calculated using the normal rule in section 187.
• Where only part of a wrongly recorded loss has been used to reduce a tax liability, the potential lost revenue is the section 187 calculation for the part used, plus 10% of the unused part.
• These rules apply whether the inaccuracy created a loss where none should exist, or inflated a genuine loss — in the latter case, only the excess amount is considered.
• If there is no reasonable prospect that the loss could ever be used to reduce anyone's tax liability, the potential lost revenue is treated as nil.

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