Revenue Scotland and Tax Powers Act 2014 section 188

Potential lost revenue: multiple errors

Section 188 explains how to calculate the potential lost revenue when a taxpayer is liable to penalties for more than one inaccuracy, and how overstatements and understatements in the same tax period interact.

• Where multiple inaccuracies exist and the order of correction matters, careless errors are treated as corrected before deliberate ones
• Overstatements in documents for the same tax period can be offset against understatements when calculating potential lost revenue
• Overstatements must be set off in a specific order: first against non-penalisable understatements, then careless ones, then deliberate ones
• A potential loss from one taxpayer cannot be offset by a potential overpayment from another person, unless legislation specifically links their tax liabilities

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