20874

DEFAULT SURCHARGE – bank informing the Appellant about a wrong cut-off time for making CHAPS payment – reasonable excuse – appeal allowed

LONDON TRIBUNAL CENTRE

	RODCOM EUROPE LIMITED	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

			Tribunal:	DR JOHN F AVERY JONES CBE (Chairman)
JOHN ROBINSON					

Sitting in public in London on 19 November 2008

The Appellant was not represented

Pauline Crinnion, Senior Officer, HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2008

DECISION

1.	Rodcom Europe Limited appeals against a default surcharge for period 03/08 of £11,593.41.  The Appellant was not represented; the Respondent (“Customs”) was represented by Mrs Pauline Crinnion.
2.	The Appellant instructed its bank, Barclays, to make a CHAPS payment at 15:51 hours on 7 May 2008, the last day for payment of the tax due for period 03/08 using electronic means, but payment was not received until the next day.  They obtained from the bank a letter of 6 June 2008 addressed to Customs from Barclays Commercial stating that the Appellant had been incorrectly advised that the cut-off time for making CHAPS transfers was 16:00 hours, whereas the published cut-off time was 15:50 hours.  The bank said that they had now advised the Appellant of the correct cut-off times and advised them to perform these VAT payments well in advance.
3.	We saw an email of 2 July 2007 from Barclays to the Appellant informing them that the cut-off time was 4 o’clock.
4.	Mr Crinnion pointed out that the Appellant had had difficulties with last-minute CHAPS payments in the past, such as an instruction made at 3:28 on 4 May 2007 for period 03/07 that was not received until 8 May 2007 and incurred a surchrge; another for period 09/07 that the bank wrote saying that “internal processing errors resulted in the payment being delayed by 1 day” and further explained in a letter to Customs of 11 January 2008 that the instruction given at 14:28 hours was not carried out because the person who took the call may not have been aware of the multi option facility that the Appellant had enabling balances on one account to be offset against the other.  On that occasion Customs waived the surcharge as an exceptional decision.  She contended that the Appellant had enough warnings that it needed to be more careful in authorising last-minute payments. 
5.	Although the Appellant was not represented, we do not agree.  The Appellant had given the necessary instructions within the time that the bank had told them in an email was the cut-off time.  We consider that a reasonable businessman would have relied on the email in spite of the bank’s published cut-off time.  The bank could have a policy of allowing certain customers an extra ten minutes from the published time. We fully understand Mrs Crinnion’s point about the Appellant having had plenty of warnings about the dangers of last-minute payments, but here the Appellant has relied on email advice from the bank which we consider that a reasonable businessman would have relied on.  We therefore consider that the Appellant had a reasonable excuse for being out of time.  
6.	Accordingly we allow the appeal.

JOHN F AVERY JONES

CHAIRMAN
RELEASE DATE:21 November 2008

LON/08/1672