View more on these topics

Tenet to compensate over annual allowance tax bungle

Tax-Taxation-Blocks-700.jpgThe Financial Ombudsman Service has told Tenet to compensate a client for its failure to give timely advice that resulted in an annual allowance charge of around £14,000.

In the ruling, Mr T was a client of Tenet Connect, Tenet’s network of advisers, who found he was under threat of redundancy and made an appointment to see his adviser in early February 2016.

Mr T says he was advised to commission a thorough review of his finances to ensure he was fully prepared financially ahead of any actions before, during and after his retirement.

At a meeting, Mr T says he told his adviser he would be able to negotiate his leaving date and asked for advice if he should make a one-off pension contribution to his defined contribution scheme through annual bonus waiver in March 2016.

He also asked if he should take advantage of a once-a-year opportunity to reduce his defined benefit pension accrual from July 2017.

Tenet Connect’s report appears to have been delayed due to the adviser’s illness and Mr T says he had to chase the report on a number of occasions.

He adds that because the report was late and he did not receive advice on whether to reduce his DB pension accrual from July so he maintained the current level of pension contributions.

Mr T retired in February 2017 and in March he contacted his pension scheme to get the actual 2016/17 pension savings figure for his tax return.

But he was told the figure was much larger than he was expecting, due to an additional state pension enhancement applied by the pension scheme.

This meant that his payments exceeded the annual allowance by a greater amount than he had expected and he incurred a larger annual allowance charge of around £14,000.

Mr T complained to Tenet and it agreed there had been errors in the report, and a delay in producing it.

Tenet offered to waive the fee charged and pay Mr T £250 compensation for the trouble he had experienced but did not agree it should pay the annual allowance charge.

The complaint was passed on to an investigator who recommended Tenet should refund its fee, pay £250 compensation to Mr T and determine whether his tax liability might still be mitigated, or, if not, to pay the additional tax liability he incurred.

Tenet did not agree with the investigator’s conclusions and argued Mr T was not able to and did not intend to delay his retirement and he should have taken steps to mitigate his loss.

Mr T also responded to the investigator’s view and said as he has already retired, there was no possibility of mitigating the tax liability and he provided evidence he had incurred tax liability of £13,859.

The case was passed on to ombudsman Alison Cribbs who says Tenet made repeated errors and the report was late which meant Mr T did not have the chance to change his contributions to his pension scheme.

She orders it to pay Mr T £13,859 in respect of the annual allowance charge he incurred, refund the fees it charged him and pay £250 compensation.



Sesame and Openwork top latest FOS complaints table

Well-known names in the advice market like Sesame, Openwork and St James’s Place have once again topped the latest complaints data as the number of complaints against financial planners has ticked up. However, the proportion of upheld complaints against the most complained about advice firms fell in the first half of the year, according to […]


FOS orders compensation over Sipp delay by Mattioli Woods

The Financial Ombudsman Service has decided that Mattioli Woods must pay compensation over a botched Sipp administration which resulted in delays to a transfer, but does not have to pay back some of the fees it charged. Despite an initial ruling in his favour, a client said the FOS adjudicator had calculated redress unfairly, and […]


FCA eyes 40 firms in adviser recruitment and training probe

The FCA is analysing information from 40 firms about their adviser recruitment processes and what quality checks are in place on the advice they give. Earlier this year, Money Marketing revealed that the FCA sent letters to a sample of firms asking about training, competence and hiring records for staff. A Freedom of Information Act request […]

death benefits pensions

Death benefits: Discretion or direction?

Jim Grant – Senior Product Insight & Technical Support Analyst, Royal London  Jim Grant considers the impact of different approaches to nominating beneficiaries for death benefits. When a pension scheme member dies, the scheme administrator has to pay the death benefits to someone. The process of choosing who the beneficiary(ies) should be can either involve the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm