Tulips World Limited v The Pensions Regulator
Neutral citation number: [2026] UKFTT 00541 (GRC)
Case Reference: FT/PEN/2025/0213
First-tier Tribunal
(General Regulatory Chamber)
Pensions
Decided without a hearing
Listed to be heard on: 16 February 2026
Decision given on: 14 April 2026
Before
JUDGE A. MARKS CBE
Between
TULIPS WORLD LIMITED
Appellant
and
THE PENSIONS REGULATOR
Respondent
Decision
The reference is dismissed.
Both the Fixed Penalty Notice and the Escalating Penalty Notice are confirmed.
The matter is remitted to the Respondent.
No directions are necessary
REASONS
Background
Tulips World Limited (“the Employer”) was served by the Respondent ("the Regulator") with a Fixed Penalty Notice ("FPN") dated 16 July 2024 under Notice number 178935698146 and an Escalating Penalty Notice (“EPN”) dated 15 August 2024 under Notice no. 260712757988.
The Regulator confirmed both notices following a review conducted on its own initiative, the Employer’s request for review having been made out of time. The Employer then appealed to the Tribunal.
Although the Employer initially requested an oral hearing, that request was withdrawn. Both parties agreed that the appeal should be determined on the papers. The Tribunal was satisfied that this was appropriate under the Tribunal Rules 2009.
The Tribunal considered a documentary bundle of approximately 306 pages, comprising evidence and submissions from both parties, including a number of previous Tribunal decisions relied upon by the Regulator.
The Law
The Pensions Act 2008 imposes statutory automatic‑enrolment duties on employers, requiring them from their "duties start date" to assess workers, communicate with them, and automatically enrol eligible jobholders into a qualifying pension scheme.
Employers must submit a declaration of compliance to the Regulator within five months of their duties start date and, every three years thereafter, employers must reassess and re‑enrol eligible staff who have left the scheme and submit a re‑declaration of compliance.
Where an employer fails to submit a re‑declaration, the Regulator may issue a Compliance Notice and, if that is not complied with, a Fixed Penalty Notice of £400, followed by an Escalating Penalty Notice imposing a daily penalty at a prescribed rate depending on the number of staff in the employer's PAYE scheme.
An employer may "make a reference" to the Tribunal (i.e. appeal), challenging a Fixed Penalty Notice and/or an Escalating Penalty Notice, provided a review has first been sought from the Regulator.
On such an appeal, the Tribunal must consider the evidence and make its own decision, with power to confirm, vary or revoke the penalty notice and to remit the matter to the Regulator with any necessary directions.
The Appeal
The Employer’s grounds of appeal in this case state, in summary:
The business was incorporated in February 2019 and was run and managed by Mr Tariq. His wife was the only co-director. Mr Tariq developed a rapidly progressing degenerative disease and their daughter, Ms Tariq, was appointed director in April 2020. Mr Tariq passed away in December 2021 aged 59.
The Employer submitted its first declaration of compliance in April 2021, naming Ms Tariq as senior contact and declaring 16 workers, none of whom were auto- enrolled in a pension scheme.
Following her husband’s demise, Mrs Tariq’s mental health seriously deteriorated. She relied on the company’s accountants and senior manager to deal with business matters, including auto-enrolment. Correspondence from the Regulator was passed to them but not acted upon.
Ms Tariq first became aware of the imposed penalties in February 2025, six months after the EPN, and contacted the Regulator. A review was later undertaken on the Regulator’s own initiative and both notices were upheld.
At the time, the business was loss-making and indebted to HMRC.
Initially, the Employer accepted that the notices were properly issued but contended that its circumstances were exceptional and constituted a reasonable excuse for non-compliance.
The Regulator opposed the appeal, contending that the matters relied upon did not amount to a reasonable excuse.
The Regulator's response
The Regulator submitted, in summary, that:
The statutory notices were properly served at the Employer’s registered office.
Responsibility for compliance remained with the Employer notwithstanding delegation to staff or external accountants.
The Regulator was not obliged to issue reminders to the Employer but did so as a courtesy.
Ill-health of one or more directors, while relevant, does not of itself render penalties inappropriate, particularly where non-compliance persists.
The Regulator repeatedly contacted the Employer over a period of many months but the Employer failed to respond or comply.
No satisfactory explanation was given as to why the Employer did not make alternative arrangements or seek further time to comply if the directors of the company were experiencing difficulties.
Late compliance, lack of awareness or failures by staff or external accountants does not excuse non-compliance within the statutory timeframe.
Re-declaration of compliance is a substantive obligation central to the Regulator's enforcement function.
The amount of the FPN is fixed by law, and the daily rate for the EPN is prescribed by law and accrued in accordance with the statutory scheme.
Further submissions
In its skeleton argument, the Employer emphasised the modest size of the business; the personal tragedies affecting the two directors; both directors being novices, thrust into the business by Mr Tariq's untimely death; and additional health difficulties affecting both Mrs Tariq and Ms Tariq. It was argued that Ms Tariq’s role was nominal and that she was herself experiencing significant personal difficulties at the relevant time.
The Employer also argued for the first time that reliance on statutory presumptions of service was unreasonable because an earlier FPN sent to the same address had been returned.
The Regulator responded that ill-health had been taken into account but did not amount to a reasonable excuse; that there was another director capable of acting; that no alternative address for service had been provided; and that service at the registered office was effective in law.
The Regulator also expressed concern that the re-declaration submitted in February 2025 did not evidence compliance with the Employer's underlying auto-enrolment duties.
Findings of fact
The Tribunal finds the following facts proved on the balance of probabilities:
The Employer is a private limited company incorporated on 6 February 2019. Its registered office address since 5 August 2021 has been Unit 2, Xcsape, Colorado Way, Castleford WF10 4TA.
The Employer’s duties start date under the Pensions Act 2008 was 1 December 2020. Its first declaration of compliance was due on 30 April 2021.
The Employer submitted its first declaration of compliance on 25 April 2021.
Mr Tariq passed away in December 2021. Mrs Tariq subsequently experienced serious mental ill-health and was unable actively to participate in the business.
Between July 2023 and April 2024, the Regulator sent multiple reminder letters and emails concerning the Employer's re-declaration obligation due by 30 April 2024.
On 9 May 2024, the Regulator issued a Compliance Notice ("CN") extending the re-declaration deadline to 19 June 2024.
The Employer did not respond or comply, so the Regulator issued a fixed penalty notice on 4 July 2024. The notice was sent to the Employer's registered office address but was returned marked "addressee gone away" so the Regulator revoked it.
On 16 July 2024, the Regulator issued the FPN now under appeal to the Employer's registered office address.
In the continued absence of any response or compliance, on 15 August 2024 the Regulator issued the EPN to the same address.
On 17 February 2025, Ms Tariq contacted the Regulator to query the penalties. She was told the re-declaration was outstanding. A payment plan was discussed.
The Employer's re-declaration of compliance was submitted on 18 February 2025, over nine months late.
During the enforcement period, HMRC data showed the number of employees within the Employer's PAYE scheme as varying but falling clearly between the 5-49 band prescribed by law for calculating the £500 daily rate of penalty under the EPN.
Consideration
Service of Notices
The FPN and EPN were sent to the Employer’s registered office address and were not returned. The return of an earlier notice does not rebut the statutory presumption of service in the absence of any alternative address for the Employer nor any evidence that later notices were not delivered. Even if the FPN and/or EPN did not reach the hands of the Employer's directors, that is insufficient to rebut the statutory presumptions.
J. M. Kamau Ltd. v The Pensions Regulator PNE/2023/0160 at paragraph 122
The Tribunal therefore finds that both notices were properly issued, served and presumed received in law.
Reasonable Excuse
The Tribunal accepts that Mrs Tariq’s ill-health was a relevant factor. However, the only medical evidence provided is dated May 2022, two years before enforcement action commenced. No evidence was provided of her health in 2024.
There was a second director, Ms Tariq, named as senior contact in the original declaration. No medical or other evidence was provided to substantiate the claim that she was incapable of acting during the relevant period. The law does not distinguish between executive and non-executive directors for the purposes of statutory compliance. Inexperience cannot amount to reasonable excuse for failing to meet statutory requirements.
The business continued to operate and employ staff. In those circumstances, it was incumbent upon the Employer - even though the directors were novices - to ensure compliance, either directly or by effective delegation with oversight.
Failures by accountants or staff do not absolve the Employer of responsibility
For example, see PEN/2018/0101 dated 23 August 2018 at para. 16
Financial difficulties and late compliance do not amount to a reasonable excuse. To hold otherwise would undermine the deterrent effect of the statutory regime.
Decision
The Tribunal concludes that the Regulator was entitled to issue both the FPN and the EPN and that, in all the circumstances, it was fair and proportionate for it to do so.
While sympathising with the directors, their deeply regrettable circumstances do not amount to reasonable excuse for failure to comply.
The amount of penalty under a Fixed Penalty Notice is fixed by law and cannot be reduced.
Likewise, for an Escalating Penalty Notice, legislation prescribes a daily rate of £500 where 5-49 persons are in the employer's PAYE scheme. The Tribunal does not consider, in all the circumstances, the accrued escalating penalty either unfair or disproportionate.
In view of the above findings, both notices are confirmed and the total sum of penalties payable by the Employer is therefore £3,400. If payment would cause hardship, the Employer can contact the Regulator to discuss payment terms.
The matter is remitted to the Regulator. No directions are necessary.
Finally, to avoid further enforcement action, the Tribunal urges the Employer to satisfy the Regulator that its re-declaration reflects full compliance with the Employer’s underlying auto-enrolment duties to all its staff.
Signed:
Judge A. Marks CBE
Date: 2 April 2026Sitting as a First-tier Tribunal Judge