Gas Smart Teeside Limited v The Pensions Regulator

1. This reference concerns a Fixed Penalty Notice (“FPN”) which was issued by the Pensions Regulator (“The Regulator”) on 28th February 2025 (Notice number: 139722560220).

2. The FPN was issued under section 40 of the Pensions Act 2008 (“the Act”) and notified the Appellant that they were required to pay a financial penalty of £400 for failing to comply with the requirements of an Unpaid Contributions Notice, which had been issued under section 35 of the Act on 3rd January 2025. The date by which the Appellant was required to comply with the Compliance Notice was 13th February 2025.

3. The Regulator carried out a review of the decision to impose the FPN and informed the Appellant on 27th March 2025 that the FPN had been upheld. The Law

4. The Pensions Act 2008 imposes a number of legal obligations on employers in relation to the automatic enrolment of certain ‘jobholders’ into occupational or personal pension schemes. The Pensions Regulator has statutory responsibility for securing compliance with these obligations and may exercise certain enforcement powers.

5. Where the Regulator is of the opinion that relevant contributions have not been paid by the employer into a pension scheme as required, it has the power under sections 37 and 38 of the Pensions Act 2008 to issue an Unpaid Contributions Notice (“UCN”), requiring an employer to calculate and pay the unpaid contributions into a pensions scheme, and to provide evidence to the Regulator that it has done so.

6. Should the employer fail to comply with the UCN, the Regulator may issue a FPN in the sum of £400 pursuant to section 40 of the Pensions Act 2008.

7. Under section 44 of the 2008 Act, a person who has been issued with a Fixed Penalty Notice may make a reference to the Tribunal provided that a review has been carried out or an application for review has been made to the Regulator. The role of the Tribunal is to make its own decision on the appropriate action for the Regulator to take, considering the evidence before it.

8. The Tribunal may confirm, vary or revoke a penalty notice and when it reaches a decision, must remit the matter to the Regulator with such directions (if any) required to give effect to its decision.   Evidence

9. The parties had agreed to the matter being determined on the papers. I am satisfied, pursuant to Rule 32(1)(b) of The Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009, that I can properly determine the issues without a hearing.

10. I have been provided with a 67-page bundle which I have read and considered. The Facts

11. The Regulator issued an UCN on 3rd January 2025, having been informed by the Appellant’s pensions provider, Nest, that contributions for the period between 1st August 2024 and 31st October 2024 had not been paid. The UCN directed the Appellant to take three steps in order to comply with the notice. These were as follows: (i) To calculate the amount of unpaid contributions due in respect of each worker who has been automatically enrolled or opted into an automatic enrolment scheme. (ii) To contact the pension scheme provider and pay the contributions; and (iii) To provide evidence of compliance to The Pensions Regulator.

12. The UCN provided examples as to what would be deemed acceptable evidence of compliance, and the deadline for complying with these three steps was stated as being 13th February 2025. The UCN additionally stated that a failure to comply with those steps before the deadline could lead to the issuing of a FPN.

13. A telephone conversation took place between the Appellant’s accountant and the Regulator on 30th January 2025, where the Regulator informed the accountant of the existence of the UCN. The accountant was seemingly unsure whether the Appellant was aware of the necessary steps for compliance, but agreed to contact the Appellant about this. The Appellant subsequently contacted the Regulator directly that same, acknowledging the outstanding contributions to be paid. During that conversation, the Regulator advised the Appellant to contact the pensions provider to arrange for the outstanding contributions to be paid, and to provide the Regulator with evidence of compliance. The Regulator tried to provide the Appellant with the email address where such evidence should be sent, but the Appellant declined this offer and informed the Regulator that his accountant would deal with the matter. There was no subsequent contact from the Appellant following the conclusion of that telephone conversation.

14. The Regulator had not received any evidence of compliance by the 13th February 2025 deadline, and consequently on 28th February 2025, the Regulator issued a FPN for £400. The Appellant requested a review of the FPN on 5th March 2025, and when the Regulator again contacted the Appellant’s accountant by telephone on 20th March 2025, the accountant then provided evidence which showed that the contributions had been paid on 5th March 2025. By the time that the contributions were paid, it was nearly three weeks after the deadline for complying with the UCN.

15. The Regulator carried out a review of the FPN and upheld the decision to impose the fine on 27th March 2025.

16. The Appellant submitted this reference to the Tribunal on 11th April 2025. Submissions

17. In the Notice of Appeal, the Appellant set out a number of grounds for the reference, which are summarised as follows: (i) The Appellant had an issue with his bank and as a result all of his direct debits were cancelled. This included the direct debit to his pension provider, Nest. (ii) As the Appellant’s workers had left the employment of the company, the Appellant did not want to set up a new direct debit and wanted to make the payment of the outstanding contributions over the telephone or online. (iii) The Appellant made attempts to pay the outstanding contributions, having been informed by the pension provider that they would not take payments online, but payment could be made over the telephone. Between 30/01/2025 and 13/02/2025 the Appellant telephoned his pension provider to make the payment on multiple occasions, but on each such occasion his pension provider refused to take the payment from the Appellant. Nest were asking the Appellant for a reference which was attributed to his accountant and not a reference which related to him as any employer. This frustrated the efforts to make the payments, as the pension provider’s staff would not take the payment from him. (iv) As the Appellant was having such difficulty with his pension provider, his accountant made the payment on his behalf on 6th March 2025, and the Appellant was then required to reimburse the accountant for this. (v) The payment was delayed as a direct result of the pension provider’s poor service, and the fine is unfair in the circumstances. (vi) The Appellant’s accountant telephoned the Regulator before the 13/02/205 deadline to explain the issues the Appellant was having in paying the contributions. However, despite being informed that this would be taken into account by the Regulator, this does not appear to have been done.

18. In response, the Regulator makes a number of submissions, which are summarised below: (i) The outstanding pensions contributions were paid to the pension provider after the FPN was issued. (ii) The Appellant was not receptive to any assistance that the Respondent was attempting to provide during the telephone call on 30th January 2025, and stated “My accountant will deal with it all, honestly, I’m not messing about like this.”. This was after being prompted by the accountant to contact the Regulator directly. (iii) Whilst the Appellant is free to delegate the completion of the Employer Duties to another, including to a third-party accountant, it is the employer’s duty to ensure that the duties are complied with, and if it delegates those duties it must take appropriate steps to ensure that the duties are complied with. (iv) The pension provider confirmed that the Appellant attempted to make payment over the telephone on 7th February 2025, but the Appellant was informed thatpayment could not be taken as it had not passed the necessary security checks, “[having] not activated their delegate access.”. Additionally, the pension provider has confirmed that payments are in fact not accepted by telephone. (v) When the Appellant’s accountant paid the outstanding contributions in March 2025, they were able to do so without the assistance of the Regulator or the pension provider. This demonstrates a lack of urgency and willingness to comply by the Appellant, and that he did not take all reasonable steps to ensure compliance before the deadline of 13th February 2025. (vi) The Appellant did not indicate in the telephone conversation with the Regulator on 30th January 2025 that he was struggling to deal with the pension provider or the bank. These Appellant did not contact the Regulator to explain these issues at any point before the FPN was issued on 28th February 2025. The Appellant could very well have contacted the Regulator in an effort to remedy the situation. (vii) The Appellant has not provided any evidence of its attempts to contact the pension provider or the cancellation of its direct debits by its bank, despite being invited to do so by the Regulator, and as such these are simply bare assertions, which do not provide a reasonable excuse. Conclusions

19. There is no dispute between the parties that the contributions for the period between 1st August 2024 and 31st October 2024 had not been paid by the Appellant, or that the outstanding pension contributions were not paid by the Appellant’s accountant until nearly three weeks after the deadline for complying with the UCN had passed. That payment was on 5th March 2025, and the FPN had been issued before then on 28th February 2025.

20. Failing to act upon a letter or Notice does not provide an excuse for failing to comply with the statutory obligations imposed by Parliament upon a company. Whilst a Regulator may send reminders to a company to adhere to its legal obligations, this does not serve to remove the duty of an employer to be aware of and adhere to the regulatory regime which they must abide by. That duty falls to the employer alone, and it is the employer’s responsibility to ensure compliance. Similarly, if an employer delegates the completion of its legal requirements to a third party, such as an accountant, it nonetheless remains the responsibility of the employer to ensure that those tasks have been completed as required.

21. Whilst the Appellant has submitted that the failure to comply with the UCN in not making the payments before the deadline was on account of the issues encountered with his pension provider and the bank cancelling his direct debits, no evidence has been provided to support these assertions. Even if that were the case, the telephone conversations that took place between the Regulator and the accountant on 30th January 2025, and then between the Regulator and the Appellant on that same day served to stress the importance of meeting the deadline for complying with the UCN by the 13th February 2025. The fact that the Appellant was asked by his accountant to call the Regulator himself should have impressed upon him that there was a need to act quickly, and certainly before that deadline passed. However, it appears that the Appellant’s attitude towards compliance with the UCN was less than cooperative, and somewhat dismissive of the need for him to be involved in the process. Even when the Regulator attempted to provide him with the relevant email for sending evidence of compliance, he was unwilling to listen. This serves to demonstrate that he did not take the issue very seriously, and the deadline for compliance passed without compliance.

22. Ultimately, the Appellant’s accountant paid the outstanding contributions and provided evidence of compliance to the Regulator on the Appellant’s behalf, albeit after the deadline had passed. That did not appear to be problematic for the accountant, and it would appear that this option had always been available to the Appellant at an earlier stage, and certainly before the deadline came to pass. Had the Appellant taken the matter more seriously, he could undoubtedly have instructed his accountant to make the payment on his behalf at an earlier stage. Of additional note is the confirmation from the pensions provider that they do not take payments by telephone in any event, despite the Appellant stating that he had been informed by them that he could make the outstanding payment contribution in that manner. However, even if someone had told him that, then the onus was still on him to ensure that his statutory obligations were met. Given that the UCN was issued on 3rd January 2025, the Appellant had until 13th February 2025 to remedy the issues set out in that notice. This is more than an adequate time in which to resolve the issues, and as has already been identified, his accountant was able to make the payment at any time on his behalf.

23. Having considered all of the arguments advanced by the Appellant, I am satisfied that a reasonable excuse for its failure to abide by its statutory obligations has not been provided. I am satisfied that the issuing of the FPN was the appropriate action to take in these particular circumstances. No consideration may be given to a reduction to the £400 penalty fee, as this sum is prescribed by the Employers’ Duties (Registration and Compliance) Regulations 2010.

24. The reference is dismissed and the matter is remitted to the Regulator. Signed:Date: Judge Armstrong-Holmes18th December 2025