Stagecoach Retirement Savings Plan · CAS-60196-Q5T2

CAS-60196-Q5T2

Ombudsman’s Determination Applicant Mr N

Scheme Stagecoach Retirement Savings Plan (the Plan)

Respondent Standard Life

Outcome

Complaint summary

Background information, including submissions from the parties Mr N is a member of the Plan, which is part of the Stagecoach Group Pension Scheme.

On 24 April 2020, Mr N telephoned Standard Life to make the Contribution. The Standard Life representative explained to Mr N that the payment could not be made over the telephone. However, he could email him the details and the relevant form to complete, so that Mr N could make the Contribution via bank transfer. During this telephone call the Standard Life representative informed Mr N that 20% tax relief (the tax relief) would not be added to the Plan because of the Plan’s rules. Mr N would need to claim the tax relief through HMRC by completing a self-assessment form.

On 27 April 2020:-

• Mr N telephoned HMRC. During that telephone call HMRC informed Mr N that he would be entitled to tax relief on his pension contributions.

• Standard Life received the Contribution.

• Standard Life sent a letter to Mr N which said:

1 CAS-60196-Q5T2 “Thank you for your email giving permission to carry out a money laundering check which has been successful. Please note that with this type of contract, tax relief is not added on. As the payment will be coming from your personal bank account, you will need to contact HMRC to sort out any tax relief on your payment.”

• Standard Life confirmed to Mr N, during two separate telephone calls, that it would not add tax relief on the Contribution. He would need to claim any tax relief through HMRC.

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1 The contents of this email are in Appendix 1.

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2 ADML1300 - Incorrect Advice to Customers: When incorrect advice can be binding - HMRC internal manual - GOV.UK (www.gov.uk) 3 These conditions are listed in Appendix 2.

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Summary of Mr N’s position

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Adjudicator’s Opinion

4 https://www.pensions-ombudsman.org.uk/sites/default/files/publication/files/Updated-Non-financial- injustice-September-2018-2_0.pdf

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Ombudsman’s decision

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Mr N has received tax relief on the Contribution but not at the level he was expecting. I find he has suffered a loss of expectation and not a financial loss..

I do not uphold Mr N’s complaint.

Anthony Arter CBE

Deputy Pensions Ombudsman 7 September 2023

9 CAS-60196-Q5T2 Appendix 1 Contents of Standard Life’s 14 October 2020 email to Mr N

“Good afternoon Mr [N]

We have been investigating your request to refund the £14,000 payment you made in August this year. The query had to be passed to our internal tax department to look into to whether the refund is authorised under the HMRC procedure [sic].

There are strict rules in place from HMRC for refunding pension contributions – they can only be refunded in the following situations:

- Contributions made in excess of earnings - Short service lump sum refunds - Customer is still within the plan’s cooling off period

Unfortunately, these situations do not apply to your case. Any refunds made outside of these scenarios will be considered an unauthorised payment and this results in a tax charge for us and yourself.

In your case, you intended to make the single payment into your plan with us and unfortunately, HMRC have made an error in their advice but this does not allow us to make a refund of contributions.

We informed you before you made the payment that for your type of plan, we can’t add tax relief so the members are directed to HMRC as standard.

Reading the letter from HMRC you attached in your secure message, it states “Please accept my apologies that we incorrectly told you that you were not entitled to relief.” This suggests that you are entitled to tax relief from HMRC and we recommend you contact them to confirm if you are eligible for this and ask them to provide instructions as to how you claim the relief from them.

Sorry we are unable to help further.”

10 CAS-60196-Q5T2 Appendix 2 Conditions of the HMRC Admin Law Manual – ADML1300 – Incorrect Advice to Customers: When incorrect advice can be binding

HMRC is only bound by incorrect advice in circumstances where all of the following tests are met:

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