Upper Tribunal confirms contribution notice

In Pelgrave v The Pensions Regulator [2025] UKUT 257 (TCC), the Upper Tribunal (Tax and Chancery Chamber) upheld the issue of a contribution notice (CN) by tPR against a director and shareholder of a family company for her role in the payment of dividends and other extractions of value from the company, at a time when its pension scheme was in deficit and the company was paying minimal contributions on account of its weak financial state.

The judgment largely involved the application of established legal principles to the particular facts of the case, but one point of interest was the rejection by the Tribunal of the target’s argument that her lack of involvement in the decision-making process meant that she was not a party to the relevant acts for the purposes of s.38(3)(a) PA04. The Tribunal held (at paras 166-167 of the judgment) that the words party to were to be given their ordinary meaning of concerned in or participating, and the status of the target in the corporate hierarchy was immaterial.

The Tribunal’s judgment can be found here.