TTR Barnes

Coomber v HMRC

A recent case ruling in HMRC’s favour has highlighted that responsibility for clearance of tax bill payments lies fully with the taxpayer.

In the Coomber v HMRC case, a taxpayer’s appeal against a late payment penalty was rejected on the grounds of it being “the taxpayer’s responsibility to ensure that any sums due to HMRC are paid on time” even though it would seem that Mr Coomber had done all he needed to ensure punctual payment of his tax bill.

These are the key events in the case:

• Mr Coomber posted a cheque for his tax bill for a total of £18,842 on 2^nd February 2016.
• HMRC received the cheque on 4^th February 2016 and the amount was credited to his account.
• The cheque was consequently dishonoured by Santander and recorded as an unpaid cheque on 8^th At this point it is worth noting that there were sufficient funds in the account for the cheque to clear.
• HMRC mistakenly informed Mr Coomber’s accountants on 1^st March that there was no outstanding payment – with this oversight occurring due to their records not being updated until 2^nd March 2016.
• Mr Coomber only realised that his cheque had not been honoured when reviewing his latest bank statement on 17^th Until this period, neither HMRC nor Santander had informed him of the issue.
• Mr Coomber paid his tax due on 17^th March 2016. However, in the interim period, HMRC had imposed a late payment penalty of £942, which equated to 5% of the amount due remaining 30 days after the payment deadline.

Logic would state that this taxpayer had fulfilled all of his obligations in ensuring timely payment of his tax bill, however the court ruled in HMRC’s favour, stating that he could have used an electronic payment method for quicker and more reliable payment and that his decision to pay so close to the deadline meant he had chosen to accept the risk that something could go wrong. Mr Coomber’s appeal was rejected and his late payment penalty stood.

What have we learned from this case?

The message from this case shows that taxpayers are ultimately responsible for ensuring that their payment reaches HMRC. In particular, those paying by cheque and/or close to the deadline should pay close attention to the progress of their payment to ensure that it has been received and there are no issues.

In any instance, make sure you are not caught out by paying your tax bills a reasonable amount of time before the deadline and that the payment method you are using is reliable and has been checked.