Revenue Scotland Charge You More Than Five Times the Rate of Interest Which They Pay You

Written by Karen Bryan

As we bought our flat in Stirling, Scotland before we had sold our house in Berwick upon Tweed in England, we had to pay the 3% additional Stamp Duty (called Additional Dwelling Supplement in Scotland) to Revenue Scotland on the day which we purchased the flat in Stirling.

Our intention was to sell the house in Berwick. But as we had paid the 3% surcharge in Scotland, we had to sell the house in Berwick within 18 months of making the purchase in Scotland in order to reclaim the surcharge.

Fortunately, our house in Berwick sold within 7 months of the purchase of the flat in Stirling. Our solicitor had paid the Additional Dwelling Supplement, so I had to fill out a paper refund form and post it to Revenue Scotland.

The refund was paid by bank transfer into my current account within three weeks. Around another three weeks later, I received a letter from Revenue Scotland confirming the refund.

In that letter, it stated that £10 interest had been paid. I was sure that I would have earned a lot more than £10 in interest if I’d had that money in an instant access savings account.

Sure enough, I went to the Revenue Scotland website to find out the rate of interest made on repayments. It was the higher of either 0.5% or the Bank of England Base Rate (which at the time was 0.25%). Therefore, I’d received 0.5% interest on that cash.

What really annoyed me was that Revenue Scotland charge you the Bank of England Base Rate plus 2.5%, a total of 2.75% (in August 2017), on unpaid tax.

It seems so unfair that Revenue Scotland charge you more than five times the rate of interest on money due to them, compared what they pay you on a refund due to you.