UT-2023-000053/54 - [2025] UKUT 00152 (TCC)

The Authority has taken its gross figures (which have never been challenged by the Applicants) for non-pension income (the amounts, other than the amounts paid into the Applicants’ pension schemes, to be disgorged), deducted the tax adjustment it calculated and then added interest at the Bank of England official rate from time to time compounded every six months to that net of tax figure. This methodology is entirely in line with the approach described in the March Decision. So, in the absence of any reasoned challenge to the Authority’s calculation of the gross non-pension disgorgement figure or the tax adjustment figure (the background to which is set out in the March Decision), we approve the Authority’s calculation of this part of the penalty.

Turning to the amounts paid into the Applicants’ pension schemes, the Authority has taken the amounts contributed by CFP in the relevant period and added to this figure a proportion (which reflects the CFP contributions as a proportion of the total size of the fund) of the total return earned by the pension scheme in the relevant period. So, for example, with Mr Price’s pension, the CFP contributions represent 25.81% of the total fund, and the amount to be disgorged in respect of his pension income comprises the CFP contributions plus 25.81% of the investment return. Again, this calculation follows the methodology in the March Decision.

By separating out the CFP contributions to the pension schemes and calculating the proportion of the overall net return that reflects the CFP contributions, in the way we have just described, the Authority’s calculation takes into account the fact that the Applicants’ pension schemes contain funds not required to be disgorged and addresses their representative’s point that “the pensions were pre-existing and involve other monies”.

For the reasons discussed in the March Decision, no adjustment for tax is to be made in respect of the amount to be disgorged by reference to an Applicant’s pension unless the Applicant indicates that they intend to withdraw funds from their pension scheme to pay that part of the penalty around the time it is calculated. In correspondence with the Authority, the Applicants’ representative indicated that the Applicants do not intend to do this.

The methodology adopted by the Authority for calculating the amount to be disgorged in respect of CFP’s contributions to the Applicants’ pension schemes correctly adopts the approach set out in the March Decision, and so, in the absence of any challenge to the Authority’s calculation of CFP’s contributions to the Applicants’ pension schemes or the investment return earned by those schemes, we approve the Authority’s calculation of this part of the penalty.

The Applicant’ means are not a factor to be taken into account in calculating the amount to be disgorged. Questions around whether, and if so how, the penalty can be enforced are not relevant to its calculation.