Underscoring the importance of employers’ compliance with statutory duties and maintaining accurate and up-to-date registered office details, a recent First-tier Tribunal decision is a reminder about adhering to their auto-enrolment obligations and the financial consequences of non-compliance.

First Steps Together Ltd, a Manchester-based company incorporated in October 2022, appealed against penalties imposed by The Pensions Regulator (TPR). Between September and December 2023, an initial penalty of £400 escalated to penalties totalling £14,400.

TPR argued that the company was required to submit a declaration of compliance by 22 June 2023, and did not do so, despite several letters and emails being sent, requesting the appellant to update its details and reminding it to comply.

In delivering its decision, the First-tier Tribunal (General Regulatory Chamber) dismissed the appeal relating to fixed penalty notices (FPNs) and escalating penalty notices (EPNs) due to the company’s failure to comply with its auto-enrolment duties under the Pensions Act 2008 (The Act).

The law is clear. Under the Act, employers must enrol eligible employees in a pension scheme and provide TPR with a declaration of compliance. Failure to comply can result in a FPN of £400 and an EPN if non-compliance persists.

In contesting the penalties, First Steps Together argued that it had not received the relevant notices because of address changes and that its accountants were responsible for pension administration. TPR maintained that the notices were properly issued to the company’s registered address. In the Tribunal appeal, Judge Maton found that the notices were properly served to that address and concluded that there was insufficient evidence to rebut the presumption of service.

The Tribunal found that the company’s failure to update its registered address or the delegation of duties to accountants did not absolve its responsibilities under the Act and were not reasonable excuses for non-compliance. In dismissing the appeal, the Tribunal upheld TPR’s penalties.

TPR has issued multiple penalties when correspondence has been missed because of incorrect registered office addresses. The Tribunal decision is a further salutary lesson for employers to ensure that their Company House records are current and that there is no danger of correspondence from the Regulator slipping through the cracks.

Employers must actively manage their pension duties. Given how TPR penalties can rapidly escalate, a relatively simple administrative error can become very costly. If a company uses its accountant’s address, it should be clear in its arrangements with those accountants where responsibilities lie.

Ben’s article was originally published in The Legal Diary, here.