A late filing case: should a taxpayer obtain a proof of posting to establish when a return is submitted, or should it be HMRC who shows proof of receipt to confirm that a return is received late?

In Heronslea Limited v HMRC [2011] UKFTT 102 (TC) a company contractor posted its monthly CIS return and incurred a late filing penalty of £100 under s98A TMA 1970.

HM Revenue & Customs (HMRC) claimed that the return was received late.

The company confirmed that it sent the return by first class post, but it did not obtain or supply a proof of posting certificate.

It lodged an appeal to the First Tier Tax Tribunal.

The company had had a number of problems with HMRC in relation to CIS in the past and the way that its director had dealt with these confirmed that it tried hard to ensure that it fulfilled its obligations. It said that it always sent its returns by first class post in time.

The Tribunal noted that as first class post normally arrives, if not the next day, at least by the day after that. A letter posted first class on 14 June could thus be expected to arrive on or before 16 June - in good time for the deadline of 19 June. 

HMRC did not provide a date-stamped CIS return or any log of post as evidence to show that it had in fact received a return late.

The CIS Regulations require that the CIS return “must be made to the Commissioners” by the due date, and the CIS return can be “made” by being sent in the post.

The Interpretation Act 1978, s 7 applies where: 

            “an Act authorises or requires any document to be served by post (whether the expression ‘serve’ or the expression ‘give’ or ‘send’ or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document.”

In the absence of any contrary intention in the relevant legislation, and noting in particular the width given to the expression “serve”, the Tribunal found that the Interpretation Act s 7 applied to the delivery of Heronslea’s CIS return to HMRC.

The Tribunal found that with no evidence from HMRC, other than its Statement of Case and the correspondence with the company, there was nothing to support HMRC’s case that the return was actually delivered late. This meant victory for the taxpayer.

Editorial comment:

  • The decision could have been decided differently had HMRC been able to provide evidence that it had robust systems in place to log incoming post.
  • A proof of posting certificate is not required by law.
  • A posting certificate provides evidence of posting and so risk adverse taxpayers who wish to rely on the Royal Mail should consider obtaining a proof of posting certificate from the post office.