When a taxpayer named Mr Coomber sent his cheque by post to HM Revenue and Customs (HMRC) to settle his tax demand, he thought that would be the end of the matter.

He paid the tax bill on 2 February 2016 and, as late as 1 March 2016, HMRC mistakenly told his agent that there was a ‘nil’ balance on his tax account.

However, on viewing his bank statements in early March, he saw that the cheque had been wrongly dishonoured by the bank on 4 February 2016. He rapidly made another payment to clear his tax account.

The result was a penalty for late payment from HMRC after the payment was credited to his tax account on 17 March 2016.

The payment due was in excess of £18,000 and the penalty was 5 per cent of the tax due after the due date, some £942.

He claimed that the penalty should be discharged because he had a ‘reasonable excuse’ for the late payment: he genuinely believed the payment had been made.

HMRC disagreed. So did the First-tier Tribunal, which ruled that ‘it was Mr Coomber’s responsibility, as the taxpayer, to make sure that his tax was paid on time. Mr Coomber chose to pay his tax liability by cheque rather than by some other means…which would have given him the immediate knowledge and assurance that the payment had been safely received. Mr Coomber also chose to pay his tax at a very late stage…in doing so, taking a risk that, if anything went wrong with the cheque, or (for example) if it went astray in the post, payment would not be made in time…’, concluding that a reasonable taxpayer would have ‘phoned the bank to find out whether the big tax cheque had cleared’.

For anyone familiar with the difficulties of dealing with many banks’ telephone banking systems, or dealing with HMRC via the Government Gateway, this conclusion may be something of a surprise. However, unless the ruling is successfully appealed, the penalty will stand.


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