Station Road, Sidcup

How can we help?

Please fill in this form and we'll get back to you as soon as possible.

Please enter your name
Please enter your email address
Please enter your telephone number
Please enter a question
Please let us know how you heard about us
Please enter the verification code

We’ll only use this information to handle your enquiry and we won’t share it with any third parties. For more details see our Privacy Policy

Bank Mistake - HMRC Still Levy Penalty

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.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.