In J Francis v HMRC (TC02860 – 26 September) HMRC imposed a penalty under FA 2009 Sch 56 on the basis that an individual (F) had failed to pay his 2010/11 tax liability by the due date. F appealed contending that he had sent a cheque for the liability but that HMRC had allocated against this against arrears for previous years rather than against his 2010/11 liability. The First-tier Tribunal allowed F’s appeal. Judge Khan held that F had ‘a reasonable excuse for assuming that HMRC would allocate the payments to the current liability rather than to the oldest debt due. The practice of the Commissioners does not appear to be covered in the legislation but rather in the Debt Management and Banking Manual (paras 210105 and 210120). It does not appear that these were brought to the notice of the taxpayer. In the circumstances therefore a...
