Pensions liberation scheme and unauthorised payment charge

In August 2012 Blu Funding telephoned the taxpayer offering him loan. He had been seeking a loan because he was in financial difficulty as a result of ill health. A few days later the company called to ask the taxpayer about his pension arrangements. It was recommended that he transfer one of his pensions to Fast Pensions Ltd. It was never explained to him that the provision of the loan was connected to the pension. The pension fund was placed in the FP1 Retirement Fund which was passed to Blu Funding part of which was repaid to the taxpayer in the form of the loan.

HMRC imposed an unauthorised payment charge on the loan.

The First-tier Tribunal said the evidence proved ‘on the balance of probabilities’ that funds moved from the FP1 account to the Blu Funding and then to the taxpayer as a...