Disputes with Revenue Scotland: appeals

The Scottish tax tribunal system deals with appeals in devolved tax matters in Scotland and is distinct from the UK tribunal structure.

The Scottish devolved taxes include land and buildings transaction tax (LBTT) which, in Scotland, replaced SDLT and Scottish landfill tax (SLfT) which, in Scotland, replaced UK landfill tax. Scottish air departure tax, the Scottish aggregates levy and wild fisheries taxes are devolved taxes but have not yet been brought into effect, although the Scottish aggregates levy is expected to come into effect on 1 April 2026. For more information, see Practice Notes: Scotland: devolved taxes and the Scottish tribunal system—outline of devolved taxes and Devolved taxes in the UK—Scotland, Wales and Northern Ireland.

Revenue Scotland is the tax authority responsible for the administration and collection of devolved taxes in Scotland.

Right of appeal

Many of Revenue Scotland’s decisions are able to be appealed by the taxpayer to the First-tier Tribunal for Scotland (Tax Chamber), which, for the purpose of this Overview, is referred to as the Scottish FTT. For more information on which of its decisions are appealable, see Practice Note:

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Latest Tax News

FTT confirms partner has no right of appeal after incorrect adjustment to personal self-assessment following partnership enquiry (Michael Kelly v HMRC)

Tax analysis: In Michael Kelly v HMRC, the First-tier Tax Tribunal (FTT) struck out the taxpayer’s appeal due to lack of jurisdiction, holding that an individual partner has no right of appeal against amendments to his personal self-assessment return following adjustments to the partnership return. HMRC’s assessments on the partner stood, even though the tax charged could be incorrect.

Upper Tribunal confirms HMRC’s power to issue assessments under TMA 1970 regarding pension scheme unauthorised payments (Trachtenberg v Revenue and Customs Commissioners)

Pensions analysis: Mr Trachtenburg (‘A’) appealed against the decision of the FTT, upholding HMRC’s assessments under section 29 of the Taxes Management Act 1970 (TMA 1970), charging him to income tax under sections 208 and 209 of the Finance Act 2004 (FA 2004). The sole issue was whether HMRC have power to issue assessments under TMA 1970, s 29. A contended: First, that the pension provisions in FA 2004 were comprehensive, the TMA 1970 does not enable HMRC to assess in the in the absence of any express application by FA 2004, s 255 or regulations issued under it, put beyond doubt by section 255(3)(b), which states that regulations under section 255 ‘may…provide for the application of any provision of the Tax Acts (with or without modification)’, unnecessary words otherwise; and Parliament had left it to HMRC to implement the necessary regulations, but they had failed to do so. Second, that TMA 1970, s 29 did not apply to income tax under FA 2004, ss 208 and 209, which did not charge income tax ‘for a year of assessment’. The Upper Tribunal (UT) rejected these arguments and dismissed the appeal. Written by Rebecca Murray, barrister at Devereux Chambers.

Double taxation tiebreakers—meaning of POEM (Haworth v HMRC)

Private Client analysis: The Court of Appeal has found that the test of ‘Place of Effective Management’ (POEM) in a double taxation treaty (DTT) is not the same as the central management and control (CMC) test for company residence. POEM is frequently used in DTTs as a tiebreaker to determine in which of two contracting states a person other than an individual (eg a company or trust) is resident for the purposes of the DTT. There is limited case law, either in the UK or internationally, on how the test should be applied. The court rejected the appellants’ submissions that a tribunal determining POEM should adopt a test derived from the CMC case of Wood v Holden, with the focus upon whether the decision-making functions of the constitutional organs have been usurped or dictated to. It found no support for this submission in authorities or materials admissible to interpret the DTT. Written by Christopher Stone KC, barrister at Devereux Chambers.

FTT dismisses taxpayer’s appeal against chargeable gains degrouping charge (Currys Retail Ltd v HMRC)

Tax analysis: In Currys Retail Ltd, the First-tier Tax Tribunal (FTT) dismissed the taxpayer’s appeal against a degrouping charge (under section 179 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)) in respect of the goodwill in four businesses that it had acquired intra–group. The FTT held that, on a realistic view of the facts, the taxpayer retained the businesses and goodwill at the time when it left the chargeable gains group and so was subject to the degrouping charge.