Case Reference: FT/PEN/2025/0003
Pensions
Decided without a hearing
Before
JUDGE HEALD
Between
CITY LOGISTICS NW LIMITED
Appellant
and
THE PENSIONS REGULATOR
Respondent
Decision: The Reference is Dismissed and the matter remitted to the Respondent (with no Directions) pursuant to section 44(4) Pensions Act 2008.
REASONS
On 11 December 2024 the Appellant made this reference (appeal) to the Tribunal. It relates to a Fixed Penalty Notice issued to the Appellant and is by way of a challenge to the Respondent's decision, dated 6 December 2024 (with reference 131187479269), to confirm the issue of that Notice following a review.
I was provided with a bundle of 121 pdf pages. There were no witness statements. What follows is a summary of the submissions, evidence and my view of the law. It does not seek to provide every step of my reasoning. The absence of a reference to any specific submission or evidence does not mean it has not been considered.
The reference was decided without a hearing. This was agreed by the parties, Directed by CMD of 30 June 2025 and allowed by rule 32(1) 2009 Rules.
The following definitions are adopted:-
IA78 | |
The Employers’ Duties (Registration and Compliance) Regulations 2010 | the 2010 Regs. |
The Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 | the 2009 Rules |
City Logistics NW Limited | the Company |
The Pensions Regulator | the Regulator |
Compliance Notice and Fixed penalty Notice | CN and FPN |
declaration of compliance | the Declaration |
the Regulator's decision after review | the Decision |
Upper Tribunal & First-tier Tribunal | UT & FtT |
Registered Office Address of the Company | the RO address |
Speedwell Accountants Limited | Speedwell |
Mr Adnan Shafiq the director of the Company | Mr Shafiq |
Parties
The Company is an employer as defined in the 2008 Act and has a number of duties including as regards jobholders and pensions. The Company was incorporated on 12 May 2023 and at all material times its RO address was 47 Bexhill Road, Stockport United Kingdom SK3 8RH. Mr Shafiq has, since incorporation, been the Company's sole Director and its Secretary and person with significant control.
As regards the Regulator the Chamber President in J. M. Kamau Limited v The Pensions Regulator (PEN/2023/0160) from para 16set out its objectives and ability to issue notices such as a FPN.
Outline chronology
The Regulator says that:-
in July 2024 it sent a letter to the Company addressed to Mr Shafiq at the RO address concerning auto-enrolment and the Declaration which had to be completed by 5 September 2024.
on 18 July 2024 data was electronically supplied to the Regulator's portal by the Company which included its primary contact address as being the RO address and the primary contact as Mr Shafiq. An email address for the Regulator to use was supplied.
on 18 July 2024 it wrote to Mr Shafiq by email confirming that his name had been provided to the Regulator as the contact for the Company.
on 29 August 2024 and 5 September 2024 it sent reminders to the same email address which included a warning about non-compliance.
on 13 September 2024 the Regulator wrote again to the RO address.
on 30 September 2024 the Regulator issued the CN to the Company by post to the RO address requiring compliance by 11 November 2024.
on 26 November 2024 the Regulator issued a FPN to the Company at its RO address because the directions in the CN had not been complied with.
on 28 November 2024 a call was received enquiring if anything was outstanding from the Company. The caller was told about the FPN.
on 28 November 2024 Speedwell, instructed by the Company, wrote to the Regulator and asked for the FPN to be reconsidered and removed. The Declaration was also then provided.
on 6 December 2024 the Regulator, having carried out a review, made the Decision to confirm the FPN.
The Reference
By this reference the Company seeks the removal of the FPN. Further Grounds were provided in a supporting letter. In box 8.1 the Company asked that the FPN be removed because of financial difficulty it faced and because by this point the Declaration had been provided. In the Grounds letter Speedwell said "... My client wishes to appeal on the grounds that they did not receive the relevant communication from the Pensions Regulator, which ultimately resulted in the penalties being imposed." In support the Grounds said:-
"...It is unclear whether this was due to a postal error or some other unforeseen circumstance."
"Upon learning of the penalties, City Logistics NW Ltd has taken immediate steps to address the matter, including seeking professional advice to ensure compliance with all future requirements"
"The lack of response to the regulatory letter was not a willful act of negligence but a result of not receiving the correspondence. Penalizing my client for an oversight beyond their control seems unduly harsh"
"... we have made sincere efforts to comply with the regulations. We have already submitted the due pension regulation declaration. We as an accountant assure that my client and we submit declaration on time."
The Regulator has provided a response dated 25 March 2025. In it as regards service of the CN and FPN they:-
rely on the presumptions of service set out in section 303(6)(a) of the 2004 Act, reg 15(4) of the 2010 Regs and on section 7 of IA78 and on the basis of legal authorities say that the Company has a high bar to overcome to evidence that the FPN was not received.
say that the Grounds are a "bare denial " of receipt and that the Company "...has provided insufficient evidence to discharge the burden of proof."
As regards the alleged non-receipt of correspondence other than the CN and the FPN the Regulator says that even if this is correct it is not a reasonable excuse for non-compliance as such advisory correspondence, aimed at reminding the Company of its obligation, is not a statutory requirement and does not "absolve an employer from complying with their automatic enrolment duties." However its case is that on the balance of probabilities they were received because:-
when the Company logged onto its portal on 18 July 2024 it must have had a code which could only have been obtained from the headings of the July 2024 letter or by using the Regulator's portal using HMRC’s accounts office reference number and PAYE reference number. If the former then the July 2024 letter must have been received and if the latter then that is evidence of some awareness by the Company or their representative of the need to contact the Regulator at that point in time.
no explanation is given for the alleged non receipt of the emails sent to the email address provided.
in so far as non-compliance was caused by delegation to a third party that does not remove the Company's obligations or liability for the FPN if in default.
Relevant law
The Company, by section 11 of the 2008 Act, is required to provide the Declaration to the Regulator within the time limits and containing the prescribed information set out in the 2010 Regs. This obligation exists whether not the Regulator sends advisory emails.
By section 35 of the 2008 Act the Regulator may issue a CN if it is of the opinion that there has been a failure to comply with an obligation such as that referred to above.
By section 40 of the 2008 Act the Regulator may issue a FPN if it is of the opinion that there has been a failure to comply with a CN issued under section 35. By reg 12 of the 2010 Regs the FPN is £400.
By section 43(1) of the 2008 Act the recipient of a Notice may (within time limits) apply to the Regulator for a review of a Notice and the Regulator may carry one out of its own volition if it considers it appropriate to do so.
Only if there has been a review (as in this case) can there be a reference to the Tribunal by section 44(1) of the 2008 Act. The Tribunal's role, if there is a reference, is set out in section 103 of the 2004 Act. As said in Kamau when considering a reference:-
The Tribunal must make its own decision following an assessment of the evidence presented to it (which may differ from the evidence presented to The Pensions Regulator), and can reach a different decision to that of The Pensions Regulator, even if the original decision fell within the range of reasonable decisions
The Regulator when carrying out a review and the Tribunal on a reference is entitled to consider reasonable excuses for non compliance by an employer. In The Pensions Regulator v Strathmore Medical Practice [2018] UKUT 104 (AAC) the UT said at para 16:-
"...Although the legislation says nothing about reasonable excuse, it does not prevent the Regulator (or the First-tier Tribunal) from having regard to it. I do not go so far as to say that they must always have regard to it – there might wellbe a case where that would not be appropriate – but it is certainly proper to take reasonable excuse into account."
The Regulator in this case relies on the presumption of service. The Company is a body corporate and by section 303(6)(a) of the 2008 Act:-
"For the purposes of this section and section 7 of the Interpretation Act 1978 (c. 30) (service of documents by post) in its application to this section, the proper address of a person is—...(a)in the case of a body corporate, the address of the registered or principal office of the body"
Section 7 IA78 says:-
"Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
Reg 15(3) and (4) of the 2010 Regs says:-
The presumptions in paragraph (4) apply where notices to which section 43 applies are issued (including compliance notices issued under section 51 of the Act and penalty notices issued under section 52 of the Act).
For the purposes of this regulation, it is presumed that—
(a)where a notice is given a date by the Regulator, it was posted or otherwise sent on that day;
(b)if a notice is posted or otherwise sent to a person's last known or notified address, it was issued on the day on which that notice was posted or otherwise sent; and
(c)a notice was received by the person to whom it was addressed."
The presumptions can be rebutted by the Company but it has the burden of doing so (Kamau para 107) If it does then the burden passes back to the Regulator. Rebutting the presumption will require more than a bare denial (see the UT in London Borough of Southwark v Akhtar and Stel LLC [2017] UKUT 150 (LC) (20 April 2017 at 84).
Tribunal's review
I have considered the evidence in the Bundle. The issues raised by the Company amount to a consideration of whether the Notices were issued to and received by the Company and whether the Company had a reasonable excuse for non- compliance.
The Company says that its non-compliance was caused by not having received the Regulator's correspondence. In its Grounds letter the Company said:-
"My client wishes to appeal on the grounds that they did not receive the relevant communication from the Pensions Regulator, which ultimately resulted in the penalties being imposed. City Logistics NW Ltd has always been diligent in fulfilling their regulatory obligations. However, in this instance, they were unaware of any correspondence that required their attention. After speaking with the pension regulator we came to know that the fixed penalty has been issued to our client. We have updated the pension regulator and already did the client pension declaration....To support this appeal, I would like to highlight the following points:
Lack of Receipt of Regulatory Letter: My client did not receive the pension regulatory letter, and as such, they were unable to take the necessary actions within the stipulated timeframe. It is unclear whether this was due to a postal error or some other unforeseen circumstance. "
In the letter seeking a review the Company said:-
"It has come to our attention that your office has been sending letters and correspondence to 47 Bexhill Road, Stockport, United Kingdom, SK3 8RH, but my client did not receive such letters. As a result, City Logistics NW Ltd did not receive any formal notice, reminder, or communication from The Pension Regulator regarding the breach or pending fine. Had my client received such communication, he would have responded promptly and rectified any compliance issues. The failure to deliver your correspondence to the correct address has directly resulted in our client's inability to act in a timely manner... In addition to the postal error...the failure of both postal and communication deprived City Logistics NW Ltd of the opportunity to rectify any compliance issues or address concerns raised by your office"
Irrespective of whether the Regulator sent advisory letters to the Company it was required to submit the Declaration within certain time limits which it failed to do.
In any event based on timings (and in the absence of an explanation from the Company) in my view it is probable that the Company accessed the Regulator's portal with the Code from the July 2024 letter which was sent to the RO address and which therefore must have been received. Thereafter the Regulator sent its advisory and chasing communications to the email account supplied by the Company. The Company, in its letter seeking a review and Grounds, does not specifically mention email correspondence and as the Regulator said in its response (to which the Company has not replied) "35. The Appellant has not accounted for why these emails were not received." There can be reasons why emails are not received but none are suggested by the Company. I do not know if they were opened or read, but I have concluded that they were at least received into the Company's email account.
In its response the Regulator says:-
"The Respondent was still not contacted by the Appellant by the deadline of 27 September 2024, so a CN was issued to the Appellant on 30 September 2024 to the Bexhill Road Address (the registered office address)..."
I conclude that the Regulator was acting appropriately when issuing the CN as the Company had not supplied the Declaration within the time limits required and had not provided a reasonable excuse. The CN is dated 30 September 2024 and addressed to Mr Shafiq and the Company at the RO address (which was also the address supplied to the portal). It gave the Company until 11 November 2024 to comply.
As regards the issue and sending of the CN I accept the evidence given to the Tribunal in Kamau and rely on para 80 in that Decision:-
"80 In future cases before this Tribunal, The Pensions Regulator is entitled to rely upon the evidence of Ms Doherty, as detailed in [32] to [55] above, as to the system it operates for the issuing of IPBs, FPNs and EPNs. There will be no further requirement to produce a witness statement detailing these processes, unless a direction is made to that effect in a given matter".
As regards the receipt of the CN in my view what is said by the Company amounts only to a bare denial and does not go far enough to overturn the presumption of service set out in reg 15(3) and (4) of the 2010 Regs. If necessary this view is bolstered by my conclusions as regards delivery of the July 2024 letter to the RO address and delivery of the advisory emails. Additionally I have considered the timing of the call to the Regulator on 28 November 2024 being just after the FPN was issued. In the absence of an explanation from the Company as to what prompted that call my conclusion is that it was caused by receipt of the FPN or because the Company had provided the Regulator's communications (it had received) to Speedwell.
It therefore follows that it was appropriate for the Regulator to issue the FPN on 26 November 2024 after the time to comply with the CN had expired.
As regards other matters:-
the Company gives no evidence of its financial position and in any event reg 12 of the 2010 Regs requires the FPN penalty to be £400.
there is a suggestion, in the letter from Speedwell of 28 November 2024, that non-compliance may have had something to do with the Company's previous accountants. Even if this could be established this would not amount to a reasonable excuse for the Company not performing its obligations. I agree with the decision of the FtT in Elegance Barbers (Poole) Limited v The Pensions Regulator [2025] UKFTT 886:-
If the Tribunal were to permit an employer to not be subject to a penalty, simply because they delegated the responsibility to someone who failed to comply, then the system as set up by Parliament would be so undermined as to become obsolete. Every employer would be able to delegate responsibility to someone who would then (with no consequence) fail to comply."
it is accepted that after the date for compliance and after the issue of the FPN the certificate was submitted however late delivery of the Declaration after issue of the FPN is not a reasonable excuse for the original non-compliance.
while there is no evidence to suggest that non-compliance was intentional (and ignoring my finding that the advisory correspondence and the CN was received) it is not a reasonable excuse for the Company to say that its non-compliance was as a result of a lack of awareness of its statutory obligations.
Decision
The Regulator carried out a review and the Tribunal has jurisdiction. I have concluded that:-
the Company had no reasonable excuse for failing to comply with its obligation to submit the Declaration and then as directed in the CN.
the CN (and FPN and advisory correspondence) were issued by the Regulator and received by the Company.
the Regulator was entitled to issue the FPN and it was appropriate to do so.
Accordingly the Reference is dismissed and remitted back to the Regulator by section 44 (4)(b) of the 2008 Act.
Signed Judge Heald Date: 16 September 2025