Key Facts
- •Cambridge Rare Books Ltd (Employer) challenged a fixed penalty notice (£400) and an escalating penalty notice (£500/day) issued by The Pensions Regulator under sections 40 and 41 of the Pensions Act 2008 for non-payment of pension contributions.
- •The notices related to unpaid contributions between 1 April 2023 and 18 July 2023.
- •The Employer cited the director's illness and the company's financial difficulties as reasons for non-compliance.
- •The Regulator upheld the fixed penalty notice after review but varied the escalating penalty notice, extending the compliance deadline to 4 February 2024.
- •The Employer appealed to the First-tier Tribunal (General Regulatory Chamber).
Legal Principles
Pensions Act 2008 imposes obligations on employers regarding automatic enrolment into pension schemes.
Pensions Act 2008
The Pensions Regulator can issue unpaid contributions notices, fixed penalty notices, and escalating penalty notices for non-compliance.
Pensions Act 2008, sections 40 and 41
A person issued a penalty notice can appeal to the Tribunal after applying for a review with the Regulator.
Pensions Act 2008, section 44
The Tribunal determines the appropriate action, considering the evidence and may confirm, vary or revoke the penalty.
Tribunal Procedure Rules
Reasonable excuse for non-compliance must be demonstrated to avoid penalties.
Case Law interpretation of Pensions Act 2008
Outcomes
Fixed Penalty Notice dismissed and remitted to the Regulator.
The Tribunal found no reasonable excuse for non-compliance, despite the director's illness, but considered the penalty to be fairly imposed.
Escalating Penalty Notice varied.
The Tribunal found that the original varied deadline (4 February 2024) was unreasonable and disproportionate given the Employer's proposed payment plan. A new deadline of 9 August 2024 was set, with a daily penalty of £500 accruing from 10 August 2024 if not met.