Non-compliance with our information gathering powers

Published: 25 October 2022

1. If a person fails to comply with our information-gathering powers, we have a range of enforcement options available, including financial penalties and criminal prosecution. You can read more about our approach when we have the choice between different enforcement options in the overlapping powers section.

Financial penalties

Fixed penalty notice

2. A fixed penalty notice (FPN) may be issued under section 77A(1) of the Pensions Act 2004 when a person has:
   • failed to comply with:
     • an information notice issued under s72 of the Pensions Act 2004 or
     • an interview notice issued under s72A of the Pensions Act 2004
   • failed to comply with a requirement given by an inspector under s75 of the Pensions Act 2004 and/or
   • prevented or hindered an inspector exercising their powers under s73, s74 or s75 of the Pensions Act 2004
3. An FPN imposes a fine for a fixed amount of money set by regulations (currently £400 for an individual or any other legal person, as set out in the tables below), which is payable by a specified date at least 28 days after the notice is issued. The FPN also specifies the failure to which it relates and a date for compliance. Where the FPN relates to a failure under s72 or s72A, it also notifies the recipient that if they continue to fail to comply after that date, we may issue an escalating penalty notice (EPN).
4. The FPN also sets out:
   • the recipient’s right to request us to review the FPN and
   • the recipient’s right of referral to the tribunal on the issue or the amount of the FPN after we have reviewed it or decided not to carry out a review

Escalating penalty notice

5. An EPN may be issued under s77B(1) when a person has:
   • failed to comply with:
     • an information notice issued under s72 of the Pensions Act 2004 or
     • an interview notice issued under s72A of the Pensions Act 2004

   In each case, the FPN will state that if the non-compliance continues after the deadline, we may issue them with an EPN.

6. An EPN imposes a fine which accrues at a daily rate set by regulations, which is payable from the date specified in the EPN (which must not be earlier than the date specified in the FPN) if the recipient continues to fail to comply with the statutory notice under s72 or s72A of the Pensions Act 2004.
7. The EPN also specifies the failure to which it relates, the daily rate of the fine (and that it will continue to be payable until the recipient complies or an earlier date determined by us), and how it is calculated, which depends on whether the recipient is an individual or other legal person.
8. The EPN also sets out:
   • the recipient’s right to ask us to review the EPN and
   • the recipient’s right of referral to the tribunal on the issue or the amount of the EPN after we have reviewed it or decided not to carry out a review.
9. Escalating penalties for individuals start at and accrue at a daily rate of £200, and for any other legal person the rate starts at £500 and increases cumulatively at a rate of £500, as set out in tables 1 and 2 below. In the first column, day 1 is the day specified in the EPN from which the escalating penalty is payable, and subsequent days are numbered accordingly.
10. The amount payable is the total of the daily rate for that day and cumulative penalties due in respect of previous days at the relevant daily rates.
11. For example, if an individual fails to comply with a s72 notice for 30 days after the EPN is issued, their penalty escalates to £6,000. If a legal person who is not an individual fails to comply with a s72 notice for 30 days after the EPN is issued, their penalty escalates to £205,000.
12. If the person fails to pay a financial penalty and remedy the breach, we may consider this to be willful non-compliance, which may ultimately lead to criminal prosecution.

Table 1: Failure to comply by an individual

Penalty type	Rate (£)
Fixed penalty (FPN)	£400
Escalating penalty (EPN)	Prescribed daily rate £200

Day	Daily rate
1	£200
2	£200
3	£200
4	£200
5	£200
6	£200
7	£200
8	£200
9	£200
10	£200
Each subsequent day	£200

Table 2: Failure to comply by a legal person other than an individual

Penalty type	Rate (£)
Fixed penalty (FPN)	£400
Escalating penalty (EPN)	Prescribed daily rate as shown below:

Day	Daily rate
1	£500
2	£1,000
3	£1,500
4	£2,000
5	£2,500
6	£3,000
7	£3,500
8	£4,000
9	£4,500
10	£5,000
11	£5,500
12	£6,000
13	£6,500
14	£7,000
15	£7,500
16	£8,000
17	£8,500
18	£9,000
19	£9,500
20	£10,000
Each subsequent day	£10,000

13. We may decide to prosecute under s77 of the Pensions Act 2004 where a person, without reasonable excuse:
    • neglects or refuses to comply with an information notice issued under s72 of the Pensions Act 2004
    • neglects or refuses to attend an interview required under s72A of the Pensions Act 2004, or to answer questions at that interview
    • intentionally delays or obstructs an inspector exercising any power under s73, 74 or 75 of the Pensions Act 2004
    • neglects or refuses to produce documents, answer questions or provide information required by an inspector under s75 of the Pensions Act 2004
    • intentionally alters, suppresses, conceals or destroys any document which may be required to be produced under s72 and/or s75 of the Pensions Act 2004
14. The types of circumstances which may constitute a reasonable excuse for these purposes include:
    • the person does not hold the information
    • the person can demonstrate that they did not receive the statutory notice
    • the requested information has not been retained due to the implementation of reasonable retention time limits
15. The fact that confidentiality agreements or non-disclosure agreements have been entered into by recipients of a notice issued under s72 of the Pensions Act 2004 in respect of the information we have sought does not typically constitute a reasonable excuse for failing to provide this information.
16. Where we decide that a criminal prosecution may be appropriate, we assess the case in accordance with our prosecution policy.

Sanctions for providing false and misleading information

17. We also have powers to impose sanctions on a person if they knowingly or recklessly provide information to us that is false or misleading in a material way, including where the information provided is represented to be compliant with a requirement:
    • in an information notice issued under s72 of the Pensions Act 2004
    • at an interview conducted under s72A of the Pensions Act 2004 or
    • of an inspector made under s75 of the Pensions Act 2004
    or was otherwise provided where the person intended, or where they could reasonably be expected to have known, that we will rely upon it for the purpose of exercising our functions under certain legislation.
18. In these circumstances, a financial penalty of up to £1 million can be imposed under s80A (applying s88A) of the Pensions Act 2004 by the Determinations Panel. Our approach to calculating these fines is set out in our high fines policy: information requirements.
19. It is also a criminal offence under s80 of the Pensions Act 2004 to knowingly or recklessly provide information to us that is false or misleading in the above circumstances, and we may decide to bring a prosecution as an alternative to pursuing the imposition of a financial penalty.
20. You can read more about our approach in situations such as these where we have a choice between powers, arising out of the same set of facts, for example, a financial penalty and/or criminal prosecution, in the overlapping powers section.

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