CED Ltd v Revenue & Customs

PAYE � Late payment penalty � Whether payments made by due dates � HMRC failed to produce evidence of dates of receipt of monthly payments � Appeal allowed

CED Limited, the Appellant, appeals against penalties charged under Schedule 56 Finance Act 2009 on the grounds that it failed to pay monthly PAYE on time.

The penalty, imposed at the 3% rate, is �22,735. It relates to months 1-9 and 11 of 2010/2011.

HMRC contend that the ten monthly payments to which the penalty relates were between two and five days late. Their evidence is based on internal records showing the �processing dates� of the payment cheques. These are said to demonstrate the late dates of the payments by CED. CED says that it always posted the monthly payments in time for them to reach HMRC by the due dates. Our conclusion is that the balance of evidence tends to support CED�s case. In particular, the evidence adduced by HMRC does not displace the case advanced by CED.

HMRC�s evidence consisted of 11 photocopied pages. At the top of each page is an �ARP Serial Number� followed by the words �Processing Date�.� The Processing Date is a date which, in 10 out of the 11 cases, falls between 2 and 5 days of the due date (the 19 th of the month) for the relevant period. On each page is a photocopy of the cheque for the PAYE tax for the period. Most of the cheques were signed by Mr Richard Davies, the financial director and company secretary of CED.