This week's opinion: 16 January 2020

Another pensions busting case has come before the First-tier Tribunal, R Rowland (TC7499). 

In this one, the taxpayer was subject not only to an unauthorised payment charge and a surcharge but was also penalised for submitting an incorrect tax return. Further, he stands to lose most if not all of his pension fund because the provider has been wound up after an investigation by the insolvency service. Cases like this leave a nasty taste in the mouth. Not because of the approach of HMRC or the tribunal, which have simply followed the law, but because the result seems very harsh. Taxpayers in these situations may be naive or even greedy but they are often caught up in situations they do not understand and have their entire financial future put in jeopardy.

I am not sure what the solution is for these sorts of cases, although it is clear that there needs to be a mixture of tax and regulatory measures. There probably does need to be a degree of financial penalty for pensions busting, otherwise everybody would do it, but I think more debate is needed on the best way of dealing with the problem and, in particular, who should bear the tax when things go wrong.