Out of the blue SH received a letter from the Pensions Regulator advising them that an escalating penalty for failure to deal with a compliance notice was accruing at the rate of £2,500 per day.
This was the first letter that SH had received from the Pensions Regulator about this. It turned out that the escalating penalty notice was in relation to the failure to complete the re-declaration of compliance due on re-enrolment. However, the client had not received the compliance notice, the subsequent fixed penalty notice of £400, or the escalating penalty notice.
The first letter arrived during holiday season and by the time that SH had sought and received an explanation from the Pensions Regulator (21 days from the date the letter was sent), the escalating penalty had reached £52,500.
Although SH had complied with its auto-enrolment duties, by mistake it had not confirmed that it had done so to the Pensions Regulator. Once it became aware of the situation, SH confirmed that it had complied and asked the Pensions Regulator to cancel the escalating penalty.
The Pensions Regulator refused on the basis that more than 28 days had passed since the escalating penalty notice had been issued and it did not consider it appropriate to allow SH extra time to appeal the penalty.
SH then came to us for help. Although there is a presumption that any correspondence prepared by the Pensions Regulator has been received, we were able to convince the Pensions Regulator that it had not been received and the Pensions Regulator agreed to cancel the penalty.
This was a substantial penalty for a small employer and could have put them out of business. Our help meant that they were able to continue to operate without having to pay a crippling debt to the Pensions Regulator.
For more information
If you would like to find out more information please contact Doug Mullen.
