‘Go chase the big corporations’ says Northampton businessman hit by ‘absurd’ tax penalty

Owner of Nene Packaging Rob Lugmayer is outraged at the tax penalty he recieved for a 'late payment'.
Owner of Nene Packaging Rob Lugmayer is outraged at the tax penalty he recieved for a 'late payment'.

A Northampton company boss who traded his company out of near certain collapse has hit out at the taxman - after he got a £3,848 bill for paying on the next trading day.

Rob Lugmayer’s Gladstone Road based Nene Packaging nearly folded back in 2008 when one of its main customers Woolworths went into liquidation while still owing his firm more than £360,000.

He only learned of Woolworth’s collapse the same day as signing a lease on a new factory.

But despite the huge losses to the medium-sized firm, which employs 45 people, Mr Lugmayer traded out of the financial black hole over a number of years rather than folding the company and starting again under a new name free of debt.

So the businessman was left furious this month after the HMRC hit him with a £3,848 bill for paying his latest VAT installment, due for Saturday, November 7, on the following Monday, November 9.

Banks do not transfer funds on a Saturday and his wife Maria, who looks after the accounts, could not make it into the office on the Friday before it due to an illness.

She cleared the bill as soon as she returned to work on the Monday - the day funds would have been cleared anyway - and informed the taxman this is what she had done.

But the HMRC said in a letter to them on December 3: “Having considered all the information you have provided us I regret to inform you that the commissioners of the HMRC do not accept that you have a reasonable excuse for the default for the period.”

The company was fined £3,848, which they believe is an “absurd” punishment.

Mr Lugmayer said. “You have a medium-sized firm like us who pay a day late and we are hit with a five per cent fine, it is ludicrous.”

Mr Lugmayer says with the nature of his company sometimes clients do not pay on time so there are sometimes cash flow issues, but though he accepts that over the difficult trading years he has occasionally had to pay tax bills late, he has never failed to pay it and has never been fined before.

In a letter to the HMRC he wrote: “You people do not live in the real world and should you ever have the chance to see life from a small business perspective then you will realise what living really is.

“A penalty of this nature is absurd for the sake of a day, when payment was due on a Saturday and was made on a Monday.”

He added: “Go chase the huge corporations.”

Mr Lugmayer intends to appeal the decision and is adamant he will not be paying the penalty.

HMRC guidelines state: “By law you must submit your VAT return and make sure that payment of the VAT due has cleared to HMRC’s bank account by the due date.”