Eagleclean Specialist Service Ltd v The Pensions Regulator

Mode of hearing

1. Both parties consented to a determination without a hearing and I am satisfied that I can properly determine this appeal without a hearing pursuant to rule 32(1)(b) of The Tribunal Procedure (First-tier Tribunal)(General Regulatory Chamber) Rules 2009, as amended (“the Rules”). I have considered the bundle comprising 241 pages. Background

2. The Pensions Regulator (“TPR”), the Respondent, is responsible for the regulations of work-based pension schemes. Established by the Pensions Act 2004 (‘ PA 2004 ’), its objectives are set out in s.5 of the PA 2004. These include protecting the benefits of pension scheme members and maximising compliance with automatic enrolment employers’ duties set out in Chapter 1 of Part 1 of the Pensions Act 2008 (“ PA 2008 ”).

3. This appeal is concerned with the employer duty to pay relevant contribution to an occupational or personal pension scheme.

4. Where the Respondent is of the opinion that relevant contributions have not been paid, it has the power under ss.37 and 38 PA 2008 to issue a Unpaid Contributions Notice (“UCN”) requiring an employer to pay unpaid pension contributions into a pension scheme and to provide evidence to the Respondent that it has done so.

5. In the event that an employer fails to comply with the UCN, the Respondent may issue a Fixed Penalty Notice (“FPN”) in the sum of £400 under s.40 PA 2008 . If an employer’s failure to comply continues, it may issue an Escalating Penalty Notice (“EPN”) where the associated escalating penalty accrues on a daily basis. Both an FPN and EPN were issued to the Appellant and are the subject of this appeal. Chronology 3 May 2023 – UCN issued 13 June 2023 – date for Appellant to comply with all three steps of the UCN 28 June 2023 –FPN 26 July 2023 – warned date to comply with UCN 28 July 2023 – penalty reminder and EPN 25 August 2023 – EPN reminder 25 September 2023 – EPN reminder 3 October 2023 – email EPN reminder Grounds of appeal

6. The Appellant, Eagleclean Specialist Service Ltd, is the employer and relies on the following grounds of appeal: a) No prior communications were received regarding unpaid contributions until 3 October 2023, when an email was sent to the Director (William Hernandez) by the Respondent’s debt recovery team. b) The Appellant challenges whether the notice were issued in the first place and the Appellant questions the method and reliability of the means of delivery. c) Prompt action was taken on receipt of the email dated 3 October 2023, where an appeal (review request) was raised. d) There are concerns about the method and reliability of the notification before the email dated 3 October 2023. The Appellant questions why email or telephone were not used to prevent the matter from escalating. e) A similar situation occurred two years ago where notices were not received via post or email. f) The registered office address is the Appellant’s Accountant’s office. g) The effect of the recent pandemic had placed strain on the business. h) The £14,000 EPN exceeds the Appellant company's financial capacity, jeopardising the business and severely limiting its ability to continue operating. i) The Appellant is committed to compliance, which can be seen in the recent status of the pension payments where contributions have been made without delay. Grounds of opposition

7. The Respondent’s position is that the appeal grounds do not amount to a reasonable excuse for the failure to comply with the UCN, nor do they indicate that the Respondent has acted unreasonably in any way. The Appellant has a statutory responsibility for complying with the UCN and providing the required information to the Respondent by the prescribed deadline.

8. The Respondent opposes the appeal and asks the Tribunal to dismiss the case because the Appellant has not provided exceptional reasons that warrant revocation of the notices.

9. The Respondent asks the Tribunal to dismiss the appeal against the EPN. The Respondent also asks the Tribunal to dismiss the appeal against the FPN, noting that the Tribunal may determine that it does not have jurisdiction to hear the appeal against the FPN on the basis that no review has been conducted for the FPN. Conclusions

10. I find that the Appellant’s assertion of non-receipt of any correspondence prior to 3 October 2023 is not sufficient to overturn the presumptions of service. I find that TPR is entitled to rely on the strong statutory presumptions.

11. TPR issued the notices by post as the permitted means to do so under the legislation. I find that the address for service was the registered office address as recorded at Companies House. I find that the registered office address is provided for the express purpose of serving as an official address by which Government bodies can send legal notices and other correspondence.

12. S.86 of the Companies Act 2006 provides that a company must ensure that its registered office is at all times at an appropriate address. S.86(3) provides that if a company fails, without reasonable excuse, to comply an offence is committed by the company and every officer of the company who is in default.

13. I find that an appropriate address would be one where a document delivered by hand or post would be expected to come to the attention of any person acting on behalf of a company.

14. I find there was no statutory failing on behalf of the Respondent in serving notices and letters to the registered office address.

15. I find that it is not relevant to this appeal that the Appellant claims not to have received previous correspondence from TPR in 2021 when using a different address.

16. I find that there is no basis for displacing the statutory presumptions of both the issuing and receipt of the notices. I find that the UCN, FPN and EPN were lawfully and correctly served. I find that the UCN the FPN and the EPN contained all the information as required by the legislation.

17. I find that for the period from at least 31 December 2019 to 7 December 2023 the Appellant was not operating its employee’s pension scheme as a prudent or reasonable employer would. The Appellant failed to set up a direct debit to ensure that payment of the pension contributions were made on a secure, regular basis. I find that payments were made on an irregular and ad-hoc basis. I find the payments made by the Appellant are set out on pages 30 and 31. It is not necessary to repeat these here.

18. I find it was proportionate for TPR to issue the UCN, the FPN and the EPN.

19. I find that the Appellant has not provided a reasonable excuse for not complying with the UCN.

20. In relation to the impact of the EPN, I find that the Appellant is a recurrent defaulter of pension contributions and there is a lengthy period of time over which pension contributions were not paid in a timely manner.

21. I find the penalty sums are proportionate in all the circumstances.

22. The Appellant has not provided any financial information about the business despite being given the opportunity to do so.

23. TPR has submitted that a repayment plan can be arranged with the Appellant if an income and expenditure sheet is provided in relation recoverability.

24. The Respondent invited me to consider striking out the appeal pursuant to rule 8 of the Rules on the grounds that the tribunal does not have jurisdiction to hear the appeal because the review request dated 3 October 2023 made reference only to the penalty notice with number 221103454940. The Respondent issued a review response on 10 October 2023 conducting a review against the EPN only. I find that the Respondent issued two penalty notices against the same breach. I find that the Appellant’s email of 3 October 2023 should be treated as an appeal against the FPN and the EPN and I find that the Respondent’s response should be treated as a review of both notices. It is fair and just to do so in all the circumstances.

25. I find that the decision to issue an EPN was fair , reasonable and proportionate and there is no persuasive justification for revoking the penalties.

26. I find the UCN, FPN and EPN were correctly served on the Appellant at their registered address.

27. I find that the breaches were not remedied until three months after the issuing of the FPN and two months after issuing the EPN.

28. I find there was no reason for the failure to make payment of the pension contributions on time.

29. It is a legal requirement for a company to have a registered office address and s.86 of the Companies Act 2006 UCN was sent to the correct registered address.

30. Accordingly, the appeal is dismissed. Signed Date: 27 February 2026 J Findlay Judge of First-tier Tribunal