Revenue Scotland and Tax Powers Act 2014 section 174

Interaction of penalties under Chapter 2 with other penalties

Section 174 prevents a taxpayer from being penalised twice for the same underlying tax liability by requiring that certain penalties are reduced where another penalty has already been charged on the same liability.

• Where a taxpayer incurs a Chapter 2 penalty calculated by reference to a tax liability, any other penalty already incurred on that same tax liability is deducted from it.
• This prevents double-counting of penalties that are both linked to the same amount of unpaid or understated tax.
• The reduction does not apply if the other penalty was itself imposed under Chapter 2, or under the separate penalty for failure to register for tax.
• The effect is that the total penalty burden on a taxpayer is capped so that overlapping penalties on the same liability are not simply added together.