Allocation of payments to HMRC

Ian Hislop once famously said after losing a libel case: ‘If that is justice then I’m a banana.’ I feel the same way after reading the decision in Kuriakos Kritikos (TC7452). This is not a recent case; in fact it was decided in October 2019 but it has only recently come into my purview.

Background

Mr Kritikos submitted his 2010-11 tax return online on 31 January 2012. It showed tax due of £1 010. He paid that £1 010 – presumably electronically although the decision does not say – on 5 May 2012. Accordingly he was liable to a late payment penalty. That is not in dispute and HMRC duly assessed a 5% late payment penalty on him of £50.

Mr Kritikos was also a partner in a partnership and had incurred a penalty of £800 for the same year for the late filing of...