Employer's Appeal Against Pensions Auto-Enrolment Fines Dismissed by Tribunal

NCN: [2026] UKFTT 00914 (GRC) Case Reference: FT/PEN/2025/0287 First-tier Tribunal (General Regulatory Chamber) Pensions Heard by Cloud Video Platform Heard on: 12 June 2026 Decision given on: 23 June 2026 Before JUDGE TAFT Between VILDE CHAYIM LIMITED Appellant (by Reference) and THE PENSIONS REGULATOR Respondent Representation : For the Appellant: [NAME], Director For the Respondent: [NAME] Decision: The appeal by reference is Dismissed. The matter is remitted to the Respondent. Mode of hearing: The Tribunal was satisfied that it was fair and just to conduct the hearing using Cloud Video Platform (CVP). Both parties were able to attend. REASONS Definitions CN Compliance Notice DOC Declaration of Compliance EPN Escalating Penalty Notice FPN Fixed Penalty Notice TPR The Pensions Regulator Introduction 1. Vilde Chayim Ltd (“the Company”) appeals by reference a decision of TPR on 17 September 2025 to issue an FPN numbered 170663416544, imposing a penalty of £400 in response to an alleged failure to file a DOC, and a further decision on 17 October 2025 to issue an EPN numbered 232547678945 to impose an escalating penalty of £500 per day. Legal Framework 2. Section 1 of the Pensions Act 2004 established TPR. Its function is to maximise compliance with employers’ duties in respect of auto-enrolment under the Pensions Act 2008 .

3. Those duties include those under The Employers’ Duties (Registration and Compliance) Regulations 2010 (“the 2010 Regulations”), which were implemented under Section 11 of the Pensions Act 2008 . They prescribe information that employers must provide to TPR and when that information must be provided – within five months of the employer’s “staging date”. This is known as a Declaration of Compliance.

4. Section 35 of the Pensions Act 2008 confirms that: (1) The Regulator may issue a compliance notice to a person if the Regulator is of the opinion that the person has contravened one or more of the employer duty provisions. (2) A compliance notice is a notice directing the person to whom it is issued to take, or refrain from taking, the steps specified in the notice in order to remedy the contravention. (3) A compliance notice may, in particular— (a) state the period within which any step must be taken or must cease to be taken; (b) require the person to whom it is issued to provide within a specified period specified information relating to the contravention; (c) require the person to inform the Regulator, within a specified period, how the person has complied or is complying with the notice; (d) state that, if the person fails to comply with the requirements of the notice, the Regulator may issue a FPN under section 40.

5. Section 40 confirms that TPR may issue an FPN if in its opinion an employer has failed to comply with, among other things, a CN issued under Section 35 . The prescribed penalty is £400 (Regulation 12 of the 2010 Regulations).

6. Section 41 confirms that TPR may issue an EPN if in its opinion an employer has failed to comply with, among other things, a CN issued under Section 35 , unless the recipient has applied for review or exercised the right of referral to this Tribunal in respect of the CN. The EPN is calculated by reference to a prescribed daily rate. That daily rate is set out in Regulation 13(2) of the 2010 Regulations and varies according to the number of employees. For between 5 and 49 employees, it is £500.

7. Section 43 confirms that TPR may review a CN, FPN or EPN on written application or where TPR otherwise considers it is appropriate. Regulation 15 of the 2010 Regulations confirms a 28-day time limit to apply for a review and 18-month time limit for TPR to review of its own initiative.

8. Section 44 gives the right to make a reference to this Tribunal if (a) TPR has completed a review of the notice under section 43; or (b) the person to whom the notice was issued has made an application for the review of the notice and the Regulator has determined not to carry out such a review.

9. In Mosaic Community Care Limited v The Pensions Regulator PEN/2015/0004, Judge Lane found that TPR cannot determine not to carry out an out of time application for review so in that case the Tribunal had no jurisdiction. Whilst not bound by that decision, I agree with the analysis. Mosaic was criticised in Philip Freeman Mobile Welders Ltd v Pensions Regulator [2022] UKUT 62 (AAC) but in respect of a different point – whether or not the presumption of service is rebuttable.

10. Section 303(2) (c) Pensions Act 2004 confirms that TPR may send CNs by post to an employer’s “proper address”, which in the case of a company is confirmed by Section 303(6) (a) as the company’s registered office or principal office. Regulation 15(4) of the 2010 Regulations creates a presumption that a CN was posted on the date indicated on its face and was received by the person to whom it is addressed. That presumption is rebuttable [ Freeman ] but the Appellant bears the burden of rebutting receipt.

11. A person to whom a notice is issued under Section 40 may make a reference to this Tribunal under Section 44 . Section 103 of the Pensions Act 2004 confirms that this Tribunal may consider any evidence relating to the subject matter of the reference, whether or not it was available to the TPR. The Tribunal must determine what if any is the appropriate action for the TPR to take in relation to the matter referred to it – the Tribunal can make a different decision to that of TPR even if the original decision fell within the range of reasonable decisions.

12. As the Upper Tribunal confirmed in Pensions Regulator v Strathmore Medical Practice [2018] UKUT 104 (AAC) , the legislation is permissive: TPR is not compelled to issue penalties. It is proper for both TPR and the Tribunal to take into account any reasonable excuse for failing to comply.

13. In J.M. Kamau Limited v The Pensions Regulator PEN/2023/0160, the Chamber President addressed the issue of the presumption of service in the context of jurisdiction. The decision is entirely about whether or not notices were issued and received. Judge O’Connor held that the notices were received because they were sent to the proper address, so the Appellant in that case had not applied for a review within the 28-day time limit. Therefore, the Tribunal did not have jurisdiction because no valid application was made for a review and because TPR had not completed a review. The decision does not consider what amounts to a reasonable excuse for failing to comply with a CN. The Decision 14. On 17 September 2025, TPR issued an FPN of £400 to the Company. On 17 October 2025, TPR issued an EPN with an escalating penalty of £500 per day.

15. On 19 November 2025, [NAME] requested a review of the decision “with letter code 1647869748” , suggesting in the request that the Company had not received any prior communication that a DOC needed to be submitted. Both FPN and EPN have the same letter code so it is not clear to which letter [NAME] referred. The EPN decision was reviewed and upheld on 25 November 2025. There was no review of the FPN, though the decision letter confirmed that the FPN was outstanding. The Appeal 16. The Company’s Notice of Appeal dated 22 December 2025 relies on the following grounds as reasons for the appeal: (a) [NAME] was unwell from 7 June, left the country on 9 July and did not return until late August/early September during which period he did not see the correspondence and did not have access to business post; (b) On his return, he gradually resumed normal duties during which period his reduced capacity and limited availability contributed to the oversight; (c) As soon as he became aware of the letter, he acted promptly to contact TPR and complete the DOC; (d) Before this he hadn’t seen any communication warning that a DOC was outstanding or that a penalty was being considered; (e) The lateness was not deliberate but genuine administrative oversight; (f) The penalty is disproportionate and does not reflect prompt corrective action; (g) The Company has paid its staff pension contributions and he believes that it is meeting its auto-enrolment duties; (h) The Company was unaware of the need for a DOC: the business has been operating for less than a year and is still learning regulatory processes and requirements; and (i) The amount of the penalty is excessive for a small business – around a quarter of annual earnings – and would cause significant harm.

17. TPR’s Response dated 27 January 2026 resists the appeal. TPR states that: (a) TPR sent a letter to the Company on 3 March 2025 explaining its employer auto-enrolment duties and that there was a deadline of 9 July 2025 to make the DOC; (b) TPR sent a further letter on 20 March 2025; (c) TPR sent a further reminder letter on 25 June 2025 warning that if the declaration was not made, the Company may be fined; (d) TPR then issued a CN on 23 July 2025, extending the deadline to 2 September; (e) TPR then issued the FPN on 17 September, directing the Company to complete the DOC and pay the fine by 15 October; (f) TPR then issued the EPN on 17 October, directing the Company to complete the DOC by 13 November or a penalty of £500 per day would accrue from 14 November; (g) TPR also sent a reminder letter re the FPN on 17 October; (h) TPR sent a reminder letter re the EPN on 14 November; (i) The Company completed the DOC on 19 November; (j) Also on 19 November, the Company requested a review of the penalty notices; (k) TPR carried out a review of the penalty notices despite the request being outside the 28-day period and confirmed the notices on 25 November; (l) The CN, FPN and EPN were sent to the Company’s registered office at Companies House, which is also the address provided to HMRC; (m) There is a presumption of service that has not been rebutted; (n) Correspondence being overlooked is not the same as it not being received, relying on Kamau ; (o) The fact that letters were not actioned cannot amount to a reasonable excuse; (p) [NAME]’s ill health is not a reasonable excuse; (q) Two reminder letters were sent before his ill health; (r) After returning to the UK, [NAME] had 16 days to comply before the FPN was issued, over 6 weeks before the EPN was issued and a further 28 days before the escalating penalty started to accrue – this was ample time to comply; (s) Even if a director was not present, this cannot amount to reasonable excuse because in Kamau it was said that a notice need not reach the hands of a particular person; (t) In any event, the Company has two directors so the responsibility for the CN could have been delegated or shared: the absence of one director should not have impacted the Company’s capacity to comply; (u) The duty to file a DOC is separate from the duty to maintain contributions – compliance with one does not absolve the Company from the obligation to comply with the other; (v) Auto-enrolment had been in place for nearly 13 years at the point the DOC was due and there is a plethora of information and guidance available to employers; (w) The composition of the Company’s workforce does not detract from the statutory duties – other similarly sized employers have complied within the relevant timescales; (x) The EPN accrued at £500 per day for 6 days between 14 and 19 November, being the daily rate of accrual for a company employing between 5 and 49 people; (y) PAYE data showed the Company had 8 employees in March 2025; (z) There were discrepancies between the DOC filed on 19 November 2025 and real time information from HMRC; (aa) TPR contacted the Company on 16 January 2025 seeking information to clarify this discrepancy but there was no response; (ab) The original failure to complete the DOC compounded by the apparent failure to do so accurately and the lack of engagement with TPR fails to demonstrate conduct of a responsible employer acting reasonably; (ac) Late compliance does not excuse failure to comply by the deadline, nor does it provide grounds to revoke the penalty; and (ad) The penalty is prescribed, reasonable and proportionate. The Evidence 18. I considered a bundle of evidence from TPR containing 98 pages. The Company provided a bundle of 31 pages containing a timeline, some of the documents already contained in TPR’s bundle and short statements from the Company’s directors and an employee. The statements broadly replicate the representations made in the Notice of Appeal and explored further in submissions. Submissions Appellant 19. [NAME] accepted that the DOC was not completed and that a CN was issued. He accepted that all correspondence was sent to the correct address. However, he contends that there was a reasonable excuse for the failure to file the DOC. 20. [NAME] submitted that the business was newly established and that he was unfamiliar with the requirement to complete the DOC. He describes working long hours during the early months of trading and being under considerable pressure during that period. He acknowledged that letters may have been sent to his co-director in March and that they may have been read and brought to his attention, but he didn’t recall seeing them and apologised if they were overlooked.

21. He said that he became unwell in or around June and was unable to attend work. He travelled abroad between 9 July and 1 September. He said whilst the trip had been planned, its purpose changed to assist his recovery. During this period, [NAME] was not present to receive correspondence and post was left unopened. He accepted that TPR correspondence may have been received. 22. [NAME] said that there was no effective delegation of responsibilities during his absence. He delegated “day to day” matters to a manager. Although there was a co-director, that individual was in full-time employment elsewhere and did not have the capacity to manage the business or deal with compliance matters. No one was tasked with opening the post.

23. Upon returning to work, initially in September and more fully towards November or December, [NAME] said that he acted promptly once he became aware of the notices. He contacted TPR immediately and sought a review, albeit unsuccessfully.

24. He said that no staff suffered a detriment because their pension contributions were paid through payroll.

25. Finally, [NAME] relied on the impact and proportionality of the penalties. He submitted that the EPN, calculated at £500 per day, produces a total liability which he said amounted to approximately one-seventh of the Company’s total holdings. Respondent 26. [NAME] submitted that [NAME] accepted that notices were received and so the statutory presumption of service was not rebutted.

27. Whilst expressing sympathy for [NAME]’s illness, [NAME] argued that this cannot amount to a reasonable excuse. The statutory obligations remained and should have been met, whether by delegation to the co-director or by putting in place appropriate arrangements during [NAME]’s absence.

28. He further relied on the communications sent before the illness, which were acknowledged as likely opened by the co-director, and the fact that there were 16 days on return to the country to comply before the FPN was imposed and another 6 weeks before the EPN with a further month before the penalty started to accrue. 29. [NAME] acknowledged that [NAME] may not have been aware of the CN, but this is not a reasonable excuse because the duty is on the Company, not [NAME]. Responsibilities should have been shared or delegated during [NAME]’s absence. The co-director may have a full-time job, but he has a statutory responsibility. Companies are expected to implement appropriate mail handling regarding their statutory duties if directors are absent.

30. It is further submitted that the Company was able to comply once engagement began, demonstrating that compliance was always achievable. 31. [NAME] further submitted that the DOC seems to be undermined by real time information from HMRC, that TPR attempted to clarify this with [NAME], but this was ignored. He suggested that the evidence may be that the Company may not in fact be complying with their auto-enrolment duties.

32. Finally, [NAME] submits that the DOC is an important statutory duty, that the level of penalties is prescribed by Regulations 12 and 13, and that the imposition of both the fixed and escalating penalties was appropriate in light of continuing non-compliance. He said that TPR has a discretion as to whether to issue a penalty but no discretion as to the amount. Findings of Fact 33. The Company was incorporated on 3 July 2023. Its registered office is 120 St Michaels Hill, Bristol, BS2 8BU. [NAME] and [NAME] are listed as company directors.

34. TPR sent two letters to [NAME], Director at Vilde Chayim Ltd at 120 St Michaels Hill, Bristol, BS2 8BU in March 2025. They confirmed, among other things, that a DOC was due on 9 July 2025. The declaration deadline is marked in bold and red at the top right corner of the letters. The second letter confirms that the Company may be subject to fines if it does not complete its DOC.

35. A further letter was sent in June 2025. The heading confirms in bold and red that [NAME] should “take immediate action to avoid a potential fine” . On the front page of the letter in bold and red, it reads “Your declaration deadline is 9 July 2025. Do not ignore this letter, you need to act now.” Underneath that, also in bold it reads “If you do not complete your legal duties, including submitting your DOC on time, you may be subject to fines.” 36. The Company did not file a DOC by the deadline.

37. On 7 June, [NAME] became unwell. He sought medical attention at least 6 times over 3 weeks in late June/early July. His ability to work during this period was reduced. He then sailed to Santander on 9 July for a pre-arranged holiday, returning via St Malo on 1 September. He remained unwell throughout the holiday, using it to rest and recuperate rather than its original purpose. He returned to work but in a reduced capacity until at least early December.

38. On 23 July 2025, TPR issued a CN to the Company, requiring it to submit a DOC with an extended deadline of 2 September 2025. The CN confirmed in bold at the top that a £400 penalty may be imposed if the Company failed to comply. The letter goes on to explain what the Company needs to do and how to do it. It concludes by informing the Company of its right to seek a review of the notice.

39. The Company did not seek a review of the CN and did not file a DOC by the extended deadline.

40. On 17 September 2025, TPR issued an FPN of £400. The notice confirmed that TPR may issue an EPN if the Company did not comply with the CN by 15 October. It concludes by informing the Company of its right to seek a review of the notice.

41. On 17 October 2025, TPR issued an EPN, requiring the Company to comply with the CN by 13 November. It states that if the Company fails to comply a penalty will accrue at £500 per day from 14 November. It concludes by informing the Company of its right to seek a review of the notice.

42. TPR also sent a reminder letter regarding the FPN on 17 October.

43. TPR sent a reminder letter regarding the EPN on 14 November.

44. On 19 November, [NAME] telephoned TPR, apparently in receipt of that letter, during which call he completed the DOC on behalf of the Company.

45. Also on 19 November, [NAME] sent an email in which he asked TPR to carry out a review of its decision. It is not clear from the email which notice is referred to because the letter code is used rather than the date of the notice, the name of the notice or the number given to the notice. The same letter code is used in all correspondence sent from TPR to the Company.

46. The reasons relied upon are that (a) “We had not received any prior communication informing us that a declaration of compliance needed to be submitted” ; (b) The Company had fulfilled its pension duties; (c) They didn’t know the DOC was required until receiving the recent letter; and (d) The penalties would place a significant strain on the Company.

47. TPR replied on 25 November 2025, referring to an application to review the EPN. It was said that this was outside the 28-day time limit but that TPR had decided to initiate a review and uphold its original decision because notices were sent to the registered office and so correctly served with a presumption of service. Sufficient guidance and time was provided to the Company to implement auto-enrolment within the required timescale. The letter does not say that the FPN was reviewed, though it does confirm that it remains outstanding. Conclusions 48. I start by expressing concern that the Tribunal may not have jurisdiction to hear the appeal against the FPN, a point not taken by TPR. TPR did not carry out a review of the FPN, and [NAME]’s email of 19 November was outside the 28-day time limit. However, given that neither party was given opportunity to address me on this point, I have made a decision about both FPN and EPN notwithstanding that concern.

49. Three letters were sent to an individual named as the Company’s director at its registered office making clear the Company’s obligation to file a DOC by 9 July 2025. Two of those letters were sent months before [NAME] began experiencing health problems. We do not know whether they were opened or read but if they had been, the Company would have had ample notice of the requirement to submit the DOC and the deadline to do so. The letters could not be clearer. In sending the letters, TPR went beyond the legislative requirements to notify the Company of its statutory obligations to file the DOC.

50. I have sympathy with [NAME], who said that he was overworked during the early months of setting up the business, and then suffered a period of ill health. However, it is clear that either he and/or [NAME], his co-director, ignored that correspondence. Had they read and actioned it, neither FPN nor EPN would have been issued.

51. The CN gave the Company a further period to do so when it failed to comply by the statutory deadline. [NAME] was out of the country by the time this would have arrived by post but the Company should have made arrangements for someone to receive and open post in his absence. The absence was planned. The Company has another director and at least one manager. Whilst I accept that [NAME] had a full-time job elsewhere, reviewing post and delegating responsibility for completion of a DOC is not an onerous task.

52. Whilst Kamau is not authority for what amounts to a reasonable excuse and therefore cannot be relied upon in the way the Respondent seeks, I do not consider that there is a reasonable excuse for failing to comply with the CN. This is because the Company’s lack of understanding about its compliance duties and the failure to open and read the CN stem from a failure to read and action correspondence sent to its registered office and a failure to delegate responsibility for mail handling in a director’s absence.

53. TPR had valid grounds to issue the FPN because the Company failed to comply with the CN. Further, it was the appropriate action for it to take in this case. A DOC is an important part of the enforcement of auto-enrolment employer duties because it provides TPR with the information it needs to ensure compliance. The Company was given ample warning of the deadline for compliance, and the consequences of non-compliance. When it did not comply, it was issued a CN with an extended deadline and further warning of the consequences of non-compliance. I have found that the letters and CN were sent and received, and that the Company had no reasonable excuse for the failure to comply. The amount of the penalty is fixed by law.

54. For the same reasons, TPR had valid grounds to issue the EPN. Further, by this time, [NAME] had been back in the country for 6 weeks. He had been working, albeit in a reduced capacity. Opening the post and reading short letters is not an onerous task. 55. [NAME] eventually took action on receipt of the reminder on 14 November. He did act promptly then and took steps to complete the DOC during his telephone call with TPR on 19 November. However, the fact that the Company eventually complied does not mean that it was not appropriate to uphold the FPN and EPN on review. Late compliance does not excuse failure to comply before the deadline.

56. In summary, there was no reasonable excuse for the failure to comply: the Company was sent numerous letters and given ample opportunity to comply. Being busy setting up the business is not a reasonable excuse. The absence of one director is not a reasonable excuse when arrangements can be made for someone else to open the post and action important correspondence. There was another director who could have done so. Whilst he had a full-time job elsewhere, this was not an onerous task.

57. I therefore dismiss this appeal and remit the matter to TPR. No directions are necessary. Signed Date: 17 June 2026 Judge Taft