First fine for accountant under TPR enrolment rules

The accountant of a London cafe has been ordered to pay £6,857 after he admitted falsely claiming to The Pensions Regulator (TPR) that staff had been enrolled into pensions

Gran Caffe Londra in Knightsbridge, run by Primadell Ltd, missed its deadline to automatically enrol staff into a workplace pension in October 2015.

TPR launched an investigation and arranged an inspection, but cancelled it when accountant Hashmukh Shah declared that the company had met its duties. However TPR later discovered that the declaration was false, no staff had been enrolled into a pension scheme and no contributions had been paid.

When interviewed by TPR, Shah, of Richmond, Surrey, admitted purposely misleading the regulator prevented an inspection of the business which would have uncovered the employer’s failure to automatically enrol its staff.

On August 15 Shah pleaded guilty at Brighton Magistrates’ Court to knowingly or recklessly providing false or misleading information to TPR. He has now been fined £3,937 and ordered to pay £2,800 in costs and a £120 victim surcharge. It is the first time that TPR has prosecuted a third party, working on behalf of an employer, for this offence.

District judge Teresa Szagun said: ‘In firefighting the financial crisis of the company, Mr Shah in fact chose to ignore the individuals who actually, as the casual workforce, were probably the least well off.

‘The false information he provided was deliberate and with the knowledge of the risks that involved, including the potential harm it could cause.’

She added that Shah was ‘remorseful and mortified about the error’ he had made.

Darren Ryder, TPR’s director of automatic enrolment, said: ‘This case sends a clear warning to accountants and advisers tasked with completing an employers’ automatic enrolment duties - providing TPR with false or misleading information may land you with a criminal conviction and a fine.

‘We do not look kindly on people whose deception gets in the way of our work.’

Gran Caffe Londra eventually became compliant in March 2018 and the company has backdated pension contributions for its staff.

Carl Johnson, partner and head of regulatory law at national law firm Stephensons, said: ‘The Pensions Regulator has been very active in taking enforcement action against businesses over auto-enrolment pension scheme failings. The use of escalating penalty notices, which can see fines increase by thousands of pounds per day, is becoming increasingly widespread. It is clear that the Pensions Regulator has not shied away from using its powers of criminal prosecution where it determines that false information has been provided regarding compliance with the auto-enrolment regime. It is an offence under s80 of the Pensions Act 2004 to knowingly or recklessly provide false information regarding compliance to the Pensions Regulator.

‘The recent conviction and sentence of Hashmukh Shah, an accountant who provided false information on behalf of a client, is a significant milestone in that it represents the first prosecution of a third party for this offence. This should serve as a warning that the Pensions Regulator is prepared to investigate and prosecute professional advisers as well as employers as part of their efforts to clamp down on non-compliance.’

Report by Pat Sweet

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