Tax Collection and Management (Wales) Act 2016 section 137

Potential lost revenue: losses

Section 137 explains how to calculate the potential lost revenue when an inaccuracy results in a loss being wrongly recorded for the purposes of a Welsh devolved tax.

• If a wrongly recorded loss has been fully used to reduce a tax liability, the potential lost revenue is calculated under the normal rule in section 135.
• If a wrongly recorded loss has only been partly used, the potential lost revenue is the section 135 amount for the part used, plus 10% of the unused part.
• These rules apply whether the inaccuracy created a loss where none should have existed, or inflated the amount of a genuine loss — in the latter case, only the excess amount is relevant.
• The potential lost revenue is nil if there is no reasonable prospect of the loss ever being used to reduce anyone's tax liability, given the nature of the loss or the taxpayer's circumstances.

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