Commentary on Provisions Part 2 – Devolved taxes administration Section 58: Set-off by Revenue Scotland
133.This section of the Act inserts section 251C into the 2014 Act. Section 251C will allow Revenue Scotland to set off a taxpayer’s credit against the same taxpayer’s debit. Doing so discharges the taxpayer’s obligations to Revenue Scotland and Revenue Scotland’s obligations to the taxpayer to the extent of this “set off”. This new power of set-off does not affect any existing power Revenue Scotland has to set off credits against debits (for example, under the common law) and is also subject to section 251D on insolvency credits and debits.
134.Subsection (3A) of section 251C modifies the definition of “debit” for the purposes of the section, clarifying that a sum is not to be treated as payable – and so cannot be subject to the set-off power – if the sum can be varied or set aside on review or appeal.
135.This section of the Act also inserts section 251D into the 2014 Act. This qualifies section 251C by providing that the set-off power in that section may not be used to set a post-insolvency credit against a pre-insolvency debit. This is intended to make clear that the set-off power is not intended to have any effect on insolvency law and that Revenue Scotland will not be advantaged over other creditors in insolvency situations.