Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00185 (TCC)

Fecha: 09-Abr-2025

Other consequences

Other consequences

620.

It was not in dispute that the Applicants have been punished in other ways: in particular, neither has been able to obtain a permanent post, see §267. Mr Donaldson said that this was the result of the Authority’s enforcement action and the subsequent issuance of the Decision Notices, adding that the Authority’s actions had also caused wider financial and reputational repercussions and had a “continued mental and physical impact”.

621.

We accept that the principal purpose of imposing a financial penalty is to deter the individuals and others from committing further breaches, as well as demonstrating generally the benefits of compliant business, see DEPP 6.1.2 cited at §577. The Applicants’ position was that these wider consequences were themselves a sufficient deterrent and no penalty was required in addition.

622.

We nevertheless decided that the wider consequences are not a relevant factor, for the following reasons:

(1)

We thought it unlikely that the reluctance of potential employers to offer the Applicants a permanent role was entirely due to the actions taken by the Authority in investigating and penalising the Applicants. On the balance of probabilities, the actions taken or not taken by the Applicants during the relevant period also play a part, and it is not realistically possible for us to disentangle the two elements.

(2)

The fact that employers and others may take a negative view of a person who has been issued with a penalty by the Authority is also not relevant to mitigation; it is instead a reasonable and likely consequence of the Authority deciding to issue the penalty.

(3)

The Authority has to take a view on mitigation when it sets the penalty. It is plainly not possible for it to take into account the future reactions of employers and others to its own issuance of the penalty.

(4)

Although an application to the Tribunal is a complete rehearing of the issues which gave rise to the Authority’s decision, that does not mean that we should take into account the consequences of the Decision Notices themselves.