Third submission

So this is the final letter that I will send to HMRC. HMRC dishonoured the bill of exchange and under the Bill of Exchange Act, they now need to exercise immediate recourse or they lose their rights  - either way the initial bill has no longer to be paid.

and to emphasise the point I included a document from their website:

IHTM19120 which confirms that 

If the holder of a bill of exchange or of a promissory note either unconditionally renounces their rights in writing, or delivers the instrument to the person liable, this discharges the obligations of the acceptor or promissor, even though no consideration is received. So this is an exception to the rule that a unilateral discharge of a debt requires some form of consideration.

Reaction of HMRC (Debt Enforcement) to my second submission

So to recap

1. HMRC sends me a bill (ie a bill of exchange) to pay
2. I reply using their bill converting it into a bill of exchange
3. They reject this and return the bill of exchange
4. I give HMRC a last chance and send a promissory note (last post)
5. HMRC replies and again returns the bill (the promissory note)

The reply is attached

As I had forgotten to send them a stamp (and despite their warning not to "waste departmental costs", they had replied). So I felt I should send them a stamp. see next posting for my final letter.