First-tier Tribunal partially allows AC & AA Limited's appeal against Pensions Regulator penalties, reducing escalating penalty from £5,000 to £1,000 over compliance date error
The First-tier Tribunal (General Regulatory Chamber) issued its decision on 16 September 2026 in AC & AA Limited v The Pensions Regulator ([2026] UKFTT 01316 (GRC)), partially allowing the employer's appeal. The Pensions Regulator had issued a Fixed Penalty Notice (FPN) and an Escalating Penalty Notice (EPN) against the company following its failure to comply with an Unpaid Contributions Notice (UCN) requiring payment of outstanding workplace pension contributions by 29 September 2025. The Tribunal dismissed the appeal against the FPN. On the EPN, however, it allowed the appeal in part: it varied the compliance date from 10 December 2025 to 19 December 2025, which had the effect of reducing the accrued escalating penalty from £5,000 to £1,000, on the basis that full compliance was achieved on 22 December 2025. The case was determined on the papers after the company's sole director, Arslan Riaz Chaudhry, was unable to attend due to health issues and could not afford legal representation. The Tribunal proceeded with consent from both parties under Rule 32 of the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009.
Why this matters
This decision illustrates a recurring compliance risk for small employers under auto-enrolment: the Pensions Regulator's penalty regime is largely automated and time-sensitive, and a short discrepancy in a compliance date can generate a disproportionate escalating penalty. The Tribunal's willingness to vary the compliance date demonstrates that procedural errors in the regulator's notice-setting process can be correctable on appeal, but that access to that remedy depends on an employer knowing how to bring an appeal, which in this case the company did without legal assistance. The case also highlights the access-to-justice dimension: the director explicitly noted he could not afford a lawyer, which contextualises the importance of the Tribunal's paper determination procedure.
On the Ground
Pension regulatory compliance work is a growing area as the Pensions Regulator increases enforcement activity against employers who miss auto-enrolment obligations. Employment and pensions lawyers advise clients on responding to UCNs, challenging FPNs and EPNs, and ensuring payroll and HR processes align with contribution deadlines. A trainee working on a pensions enforcement matter would assist with preparing appeal submissions, compiling evidence bundles of payroll records and contribution payment dates, and drafting correspondence with the Pensions Regulator setting out compliance chronologies.
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“What remedies are available to an employer that has received an Escalating Penalty Notice from the Pensions Regulator, and on what grounds might a Tribunal reduce or vary it?”
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