A K Contracting Ltd v The Pension Regulator

The Appellant is a small company with a single director which runs a construction and contracting business in Uxbridge. By this reference (or appeal) it challenges a Fixed Penalty Notice (‘FPN’) issued on 5 September 2025 by the Pensions Regulator (‘TPR’), requiring it to pay a penalty of £400 for failing to comply with a Compliance Notice (‘CN’) by the deadline of 20 August 2025.

The matter came before me for determination on the papers, both parties having stated that they were content for no hearing to be held. I was satisfied that it was just and in keeping with the overriding objective to adopt that procedure.

I was provided with a bundle of some 109 pages.

The Pensions Act 2008 (‘the Act’) imposes a number of requirements on employers in relation to the automatic enrolment (‘AE’) of certain ‘job holders’ in occupational or workplace personal pension schemes. These include delivering written notification of how the AE duties have been met, known as a ‘declaration of compliance’. TPR has statutory responsibility for securing compliance with AE requirements. If it is of the opinion that a declaration of compliance has not been delivered by the due date, it may issue a CN pursuant to section 35 of the Act

By s40 of the Act, TPR may issue a FPN in the sum of £400

TPR may review a FPN or EPN on the application of the person affected (s43(1)(a)). The effect is to suspend the relevant Notice pending the outcome of the review (s43(4)). The possible outcomes are confirmation, variation and revocation of the Notice; in the event of revocation, TPR may substitute a different Notice (s 43(6)).

By s44 of the Act, provision is made for references to the First-tier Tribunal (‘FTT’) or (in circumstances which do not apply here) Upper Tribunal (‘UT’) in (so far as material) the following terms:

In dealing with a reference the powers of the FTT are very wide. The Pensions Act 2004, s103 includes:

The material facts are not in dispute. Besides those given in para 1 above, they can be summarised shortly as follows (I borrow largely from TPR’s ‘Response’ document).

The deadline for delivery of the declaration of compliance was 2 June 2025.

TPR issued a letter on 10 February 2025, correctly addressed to the Appellant, drawing attention to the deadline.

By a further letter correctly addressed to the Appellant, issued on 2 March 2025, TPR again referred to the deadline and also requested the Appellant’s email address to facilitate easier contact.

Having heard nothing from the Appellant, TPR issued a further letter, dated 29 May 2025, again making reference to the deadline.

On 26 June 2025 TPR issued an enforcement warning letter, again correctly addressed to the Appellant, allowing it a further period of 14 days to deliver the (by now well overdue) declaration of compliance.

In the absence of any response from the Appellant, TPR on 5 September 2025, issued the FPN under challenge.

On 8 September 2025 the Appellant complied with the duty to provide a declaration of compliance and sought a review of the FPN.

On 11 September 2025, TPR completed a review of the FPN and upheld it.

The notice of appeal dated 21 September 2025 raises three grounds as follows:

The Appellant received none of the correspondence on which TPR relies , and so was unaware of its obligation to deliver the declaration of compliance until delivery of the FPN.

The breach of the obligation to deliver the declaration of compliance was remedied at once.

The breach was entirely accidental.

As can be seen, the appeal raises no challenge to the validity of the grounds on which TPR took enforcement action. It is concerned only with matters of mitigation.

I start by reminding myself of the terms of the applicable legislation (summarised above) and in particular (a) the salutary purposes which the AE regime is designed to achieve, including ensuring that qualifying workers have the chance through occupational pensions to enjoy dignity and comfort in retirement; (b) the need for the mandatory requirements of the scheme to be backed up by an effective and robust enforcement mechanism; and (c) the need for other employers to understand that those requirements will be enforced. In my view, the correct approach, as suggested by the Strathmore Medical Practice case (already cited), is to look to the Appellant to show a good reason why TPR should not have followed its usual practice of meeting a breach of a CN with an FPN.

Having considered the matter with care, I am satisfied that the Appellant has failed to make out a reasonable excuse for its non-compliance. The legislation places the burden firmly upon the employer to comply. TPR is not under any legal duty to provide advice and reminders to employers at all. But in this case I am satisfied in any event that the documents demonstrate repeated efforts by TPR to encourage the Appellant to comply. I find that the four communications which I have listed above, dated between 10 February and 26 June 2025, were duly issued by TPR on the dates they bore. Nor am I persuaded by the simple assertion on behalf of the Appellant, not supported by evidence, that none was received. In these circumstances, the first ground of appeal fails on the facts.

I accept that, as the Appellant states in its second ground of appeal, the breach of the obligation to provide the declaration of compliance was remedied swiftly. I agree that the Appellant is entitled to some credit for that. But it does not amount to significant mitigation.

As to the third ground of appeal, I accept that the Appellant is unlikely to have set out to breach its AE obligations. It is much more probable that the infringement resulted from some form of careless oversight. It would have been a worse case if it had involved a deliberate breach. But classifying it as a careless error does not provide me with a proper ground for finding mitigation sufficient to warrant interfering with TPR’s entirely justified enforcement action.

For the reasons stated, I am clear that the Appellant has not demonstrated a good excuse for its failure to meet the requirements of the CN and accordingly I dismiss the reference and remit the matter to the Regulator. No further direction is required.