Upper Tribunal Tax and Chancery Chamber

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

Fecha: 09-May-2025

Introduction

Introduction

This is our third decision in relation to the references (“the References”) made to this Tribunal by Ms Fox-Bryant and Mr Price of two Decision Notices (“the Decision Notices”) dated 3 May 2023, by which the Authority decided to:

(1)

impose on Ms Fox-Bryant a financial penalty of £681,536 under section 66 of the Financial Services and Markets Act 2000 (“FSMA”), a prohibition order under section 56 FSMA and to withdraw Ms Fox-Bryant’s approvals to perform senior management functions at CFP Management Limited (“CFP”) under section 63 FSMA; and

(2)

impose on Mr Price a financial penalty of £632,594 under section 66 FSMA, a prohibition order under section 56 FSMA and to withdraw Mr Price’s approvals to perform senior management functions at CFP under section 63 FSMA.

In a decision (the “November Decision” - Neutral Citation [2024] UKUT 00357 (TCC)) released on 13 November 2024 we dismissed the References as to the prohibition orders and withdrawals of approval. We noted that we agreed with the Authority that significant financial penalties should be imposed on both Applicants, but we decided that the size of those penalties needed to be reviewed in the light of our concern that the disgorgement element of the penalty should take account of the incidence of taxation and further consideration should be given to how interest should be charged on the benefits the Applicants derived from CFP, a company owned 50:50 by the two Applicants. At paragraph [239] of the November Decision we gave directions regarding submissions to be made by the parties on those issues.

In a second decision (the “March Decision” – Neutral citation [2025] UKUT 00087 (TCC)) released on 12 March 2025 we explained how the disgorgement element of the penalties should be calculated and remitted the calculation of those penalties to the Authority with a direction that the Authority should calculate the amount to be disgorged (step 1 in the calculation of the penalties) following the guidance we set out in that decision.

On 2 April 2025 the proposed figures and the detailed calculations prepared by the Authority were provided to the Applicants. However, despite attempts made by the Authority to agree the calculation with the Applicants, an agreement could not be reached on the revised figures.

On 28 April 2025 the Authority sent details of its recalculation of the penalties to the Tribunal and asked the Tribunal to approve these calculations and direct the Authority to issue final notices to the Applicants in the same terms as the Decision Notices issued on 3 May 2023 save in respect of the calculation and amount of the penalties, which should be recalculated as described by the Authority.

The Tribunal asked the Applicants’ representative for their comments on the Authority’s request and provided further clarification of the reasoning behind its conclusions on how tax should be factored into the amount to be disgorged in respect of the contributions to and returns derived in the Applicants’ pension schemes.

On 9 May 2025 the Applicants’ representative replied welcoming the use by the Authority of an interest rate based on the Bank of England base rate and not disagreeing with the mechanism to provide a tax-based credit. The representative stated that his “only observation is that the pensions were pre-existing and involve other monies”. He also said that “The UT would need to be satisfied that the calculations have been undertaken correctly. My clients cannot agree to the figures as they are unclear as to some of the underlying assumptions made by the Authority.”