Nothing more the taxpayer could have done

The taxpayer was described as ‘honest’ and ‘hard working’ who had to resort to payday loans because of financial difficulties. A colleague recommended a financial adviser. He arranged a loan of £20 000 for her with Blu Funding and recommended she move her occupational pension – which had a transfer value of nearly £50 000 - from a previous employment to a new private pension with a company called Fast Pensions. This the taxpayer did not knowing the transactions were connected.

Eventually after repaying some £13 500 of the loan she realised she had been badly advised and had in effect lost her pension. After an enquiry HMRC decided the loan was derived from the taxpayer’s pension and as such was an unauthorised member payment (FA 2004 s 160). It assessed to an unauthorised payments charge and an unauthorised payments surcharge.

The...