Guide to Paying Penalties for Late LBTT Returns in Scotland

Paying a Revenue Scotland Penalty for a Late LBTT Return

If Revenue Scotland issues a penalty for a late LBTT return, you should pay it using the exact reference shown on the penalty notice and make a separate payment for that penalty alone. You normally have 30 days from the date of the notice to pay or appeal, and late payment can lead to interest and further penalties.

• Use the unique Revenue Scotland reference on the penalty notice exactly as shown; older returns submitted before 24 July 2019 may use a shorter 9-character reference instead of the usual 13-character one.
• Make a separate bank payment for each penalty or tax return, and do not combine different liabilities in one transfer.
• If you use the wrong reference, an old reference, or a general office reference, Revenue Scotland may not match the payment correctly and the penalty may still appear unpaid.
• You have 30 days from the date on the penalty notice, not the date you receive it, to pay or appeal, and the payment must arrive by the deadline on a banking day.
• Late payment may trigger interest and possibly further penalties, so you should allow enough time for BACS, CHAPS or Faster Payments to clear.
• If you overpay, Revenue Scotland will usually try to refund £100 or more, but smaller overpayments may only be refunded if you ask, especially if repayment details are not already held.

Scroll down for the full analysis.

How to pay a Revenue Scotland penalty for a late LBTT return

This page explains how Revenue Scotland says a penalty for a late Land and Buildings Transaction Tax return should be paid, what reference you must use, when payment is due, and what can happen if payment is late. The main practical point is that Revenue Scotland matches payments by reference. If the wrong reference is used, or if combined payments are made, this can cause problems.

What this rule is about

When Revenue Scotland issues a penalty notice for a late LBTT return, the penalty must be paid in a way that allows it to be linked to the correct transaction or penalty charge. The official guidance is mainly about payment mechanics rather than the legal basis of the penalty itself.

It also deals with three related issues:

• the deadline for paying or appealing the penalty notice
• the risk of interest and further penalties if payment is late
• what happens if too much is paid

What the official source says

Revenue Scotland says the unique reference number shown on the penalty notice must be quoted when making payment. This is normally a 13-character tax reference beginning with “RS”, followed by 7 numbers and ending with 4 letters.

The guidance notes that returns submitted before 24 July 2019 have a 9-character reference instead, beginning “RS” and followed by 7 numbers.

Revenue Scotland says the full 13-character reference, and only that reference, must be used when:

• making payments in relation to the transaction
• contacting Revenue Scotland about the transaction

The guidance also says that the payment should exactly match the rounded total tax payable amount submitted in the return. Although that wording appears in the same payment guidance, readers should note that a penalty payment is a separate liability from the tax itself, and the penalty notice reference is what Revenue Scotland says must be used for penalty payments.

Payment by BACS, CHAPS or Faster Payments should be made to Revenue Scotland’s specified bank account. A separate payment must be made for each tax return or penalty.

If a penalty is paid late, interest is chargeable and a further penalty may also arise.

If you receive a penalty notice, you have 30 days from the date of the notice to either pay it or appeal it.

The latest payment date must be a banking day, and Revenue Scotland says you must allow enough time for the payment method used so that it arrives by the deadline.

On overpayments, Revenue Scotland says it will make every effort to refund overpayments of £100 or more. If the overpayment is less than £100 and Revenue Scotland does not hold repayment details, a refund will only be made if requested. Unclaimed overpayments are paid to the Scottish Consolidated Fund.

What this means in practice

The key practical message is simple: use the exact reference shown on the penalty notice, and do not combine payments.

In practice, the main risks are administrative rather than legal. A penalty may remain shown as unpaid if:

• the wrong reference is entered
• an old reference is used
• more than one liability is paid in a single transfer
• the payment arrives after the deadline

That matters because Revenue Scotland’s guidance says late-paid penalties can attract interest and may lead to further penalties.

The 30-day period is also important. The guidance says you have 30 days from the date of the notice to pay or appeal. That means a recipient should quickly decide whether:

• the penalty is accepted and should be paid
• there may be grounds to appeal instead

The guidance does not say that asking a question informally stops the clock. So, on the face of this material, a query is not the same as an appeal.

How to analyse it

If you have received a late LBTT return penalty notice, work through these points:

• Identify the exact reference on the notice. Check whether it is the 13-character form or, for older returns submitted before 24 July 2019, the earlier 9-character form.
• Use that reference exactly as Revenue Scotland requires. Do not add other wording if the payment system allows only a limited reference field.
• Make a separate payment for that penalty. Do not combine it with LBTT tax due on the return or with another penalty.
• Check the deadline. The guidance says you have 30 days from the date of the notice to pay or appeal.
• Make sure the payment can clear by the due date, bearing in mind that the latest payment date must be a banking day.
• If you think too much has been paid, consider whether Revenue Scotland already has repayment details. If not, and the overpayment is under £100, a refund will only be made if requested.

If there is uncertainty about the payment method, Revenue Scotland says queries can be raised through secure messaging in the SETS portal or by email.

Example

A buyer’s agent receives a Revenue Scotland penalty notice for late filing of an LBTT return. The notice shows an RS reference. The agent also still needs to deal with tax on another transaction.

Under the guidance, the safer approach is to make one payment for the penalty only, using the exact reference on the penalty notice, and a separate payment for any other transaction or liability using its own correct reference. If the agent instead sends one combined payment with a general office reference, Revenue Scotland may have difficulty allocating it correctly.

Why this can be difficult in practice

The official material is clear on the need to use the correct reference and to make separate payments, but real-world payment systems do not always make this easy. Firms may use bulk payment processes, internal ledger references, or banking systems with limited reference fields. Those systems can create a mismatch with Revenue Scotland’s requirement to quote only the unique tax reference.

There is also some room for confusion because the page refers both to payments for the transaction and to payment of a penalty. In practice, tax due under a return and a penalty for late filing are distinct liabilities, even though the payment guidance sits on one page. That is why the instruction to make a separate payment for each tax return or penalty is important.

Another practical difficulty is timing. The guidance says the deadline is 30 days from the date of the notice, not 30 days from receipt. If a notice is seen late, the time available may be shorter than expected.

Key takeaways

• Use the exact Revenue Scotland reference shown on the penalty notice, and only that reference.
• Make a separate payment for each penalty or tax return; do not combine liabilities in one transfer.
• A penalty notice must be paid or appealed within 30 days of the date of the notice, and late payment can lead to interest and possibly further penalties.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Paying Penalties for Late LBTT Returns in Scotland

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