Provided incorrect information - help, any ideas

xylophone

From the outset yesterday I haven't had any thoughts of not paying the tax. I accept it will need to be paid if I cannot repay the sum in full. But it appears the SIPP provider simply want to wash there hands of it, 'bung' me £500 to keep quiet and that simply isn't going to happen.

I have gifted and spent a significant amount (why wouldn't I?) and I can trawl other savings and ISA's and get somewhere close to the amount but I still expect to have a shortfall of £10-£40K. There's not a hope in hell I'm asking the SIPP provider to lend me the money. The tax liability is the undeniable result of their bad advice 

See my previous. Good Luck - in my opinion (I hope I am entitled to an opinion) you are in the right.

eskbanker

I'd suggest that the ombudsman route is unlikely to bear fruit in the short to medium term - FOS will only accept escalation of a complaint if it's first been through the institution's formal complaints process, for which eight weeks is generally allowed, and even then the time for FOS to allocate a case handler is typically measured in months, and often plenty of them.  It may be that in your circumstances it's feasible to expedite FOS attention, but it's far from certain that this would work....

Culzean

xylophone said:

And should the provider be reported to their regulator for (at the least) failure to ensure that their employees are properly trained?

I will definitely pass this to the Ombudsman who I believe comes under the jurisdiction of the regulator

xylophone

I think that you should.

I would have said at least to ensure that no other client is similarly misled. 

But perhaps the Ombudsman will say that the provider has learned from their admitted error in your case.

They might have learned from that particular error.

But what other lacunae exist in their staff training?

Culzean

Tommyjw said:

xylophone said:

Ultimately, tax is a personal affair and they are not an adviser,

So that they should have told the OP this at the outset?

Instead, fully knowing the OP's situation, the person who took the original enquiry consulted with (presumably) the relevant department/team and came back with a response in writing which led the OP to take action on that response.

In effect they gave advice they were not qualified or authorised to give?

They made a professional mistake so should look to their PI company?

They likely did tell OP, in the terms the OP signed up for when he set up the SIPP, and on likely many other kinds of paperwork since.

Of course they didn't give advice in the proper sense, they are literally not adviser ,they literally cannot give advice. A customer service agent is not qualified to give advice and the Ombudsman would never hold them to that standard. 

This would never go to their insurance, everyones knows this, it is not worth repeating and does nothing but give people false hope.  

I am being realistic and telling OP what happens in the real world, in the real world the Ombudsman tells providers to offer to put someone in the position they would have been in had the error not occured and to pay good will compensation to cover any distress e.g. in the £100's or low thousands  the provider has offered that ,  and i amsure would cough up a reasonable compensation amount if e.g. there are penalties for getting money out of investements to give it back. Likewise, if pushed, they may offer an increased e.g. a £1000 or £2000 compensation amount.

But like another posted said, they absolutely will not and will never cough up £60k or anything remotely close to it. It won't happen. It is silly to claim it would. The starting basis should be dvising the OP what is actually possible in the real world.

I would challenge the fact that they ever said anything or indeed that it is anywhere in their T&C's. Perhaps it is but I would be surprised if there were anything there to deal with "what happens if I am going to die in the next 12 months".

I am just a customer. I went to them and asked them the question "Can I withdraw the balance of my SIPP without paying tax?" They responded in writing telling me I most certainly could and then what I needed to do in order to get it. I followed their instruction to the letter.

Now (10 weeks later) they are telling me I am liable for a £60,000 tax bill, that they had calculated that. In fact even if I had zero income the figure is well in excess of £100,000. 

I don't dispute for one second that tax is due, that has now been shown to me. But I don't have all the money to repay, I have spent some and gifted some ... why wouldn't I? But I am now going to be saddled with a tax bill somewhere between £2,000 and £10,000 and if the laws of this land don't protect me from being put into this position then I would be horrified.

I think your post is entirely sensible and it's what I fear may be the view of whoever ends up adjudicating this matter as inevitably someone will      

Culzean

Tommyjw said:

xylophone said:

And should the provider be reported to their regulator for (at the least) failure to ensure that their employees are properly trained?

This kind of silly nonsense does absolutely nothing for OP except muddy the waters.

No, they shouldn;t, it wouldn't happen, the regulator wouldnt care or listen. To suggest an employee error should go the regulator is beyond laughable and is just spamming at this point. 

I assumed the Ombudsman was within the regulatory framework but I've just discovered that he is not

xylophone

I assumed the Ombudsman was within the regulatory framework but I've just discovered that he is not 


Then  presumably the Ombudsman will not take it up with the regulator.

However, I am still disturbed by the fact that this is not just a case of a telephone clerk making an error.

The clerk was himself unsure of the position (as were you) and therefore made the positive decision to consult the provider's 

department/team manager (?) responsible for answering such queries.

In a case as serious as yours (terminal illness/a large sum of money/  financial circumstances altering decision) surely this

person should not have replied in the terms stated without cast iron certainty of the facts?

I ask again, what other gaps are there in their knowledge or training?

And if weak in this area, just what body is responsible for protecting the public from their mistakes?

Culzean

xylophone said:

From the outset yesterday I haven't had any thoughts of not paying the tax. I accept it will need to be paid if I cannot repay the sum in full. But it appears the SIPP provider simply want to wash there hands of it, 'bung' me £500 to keep quiet and that simply isn't going to happen.

I have gifted and spent a significant amount (why wouldn't I?) and I can trawl other savings and ISA's and get somewhere close to the amount but I still expect to have a shortfall of £10-£40K. There's not a hope in hell I'm asking the SIPP provider to lend me the money. The tax liability is the undeniable result of their bad advice 

See my previous. Good Luck - in my opinion (I hope I am entitled to an opinion) you are in the right.

Thank you and for the record the response from the provider was clear and unambiguous (the words in my OP were a direct quote). After that I followed their instructions to the letter.

I do understand others saying they are not advisers but then I didn't go to them for advice. I went to them understand if the regulation allowed me to take the balance of my SIPP tax free. If I couldn't ask them with confidence who on earth could I ask?

On every other occasion (none in past 2 years) that I have withdrawn from my SIPP they have deducted tax at source. This time and as a consequence of my health condition they confirmed that they didn't need to and that no tax would be due. So I went ahead.

They have screwed up. In my opinion it doesn't matter if it was just one employee getting it wrong (which obviously it wasn't), as an organisation they got it wrong and they have to accept the consequences of that (whatever 'that' is I don't know but it certainly isn't £500 to me and me paying several £thousands to HMRC)  well, that's what I hope!

Culzean

(Removed by Forum Team)

Thanks for your time. I get where you are coming from even though I might disagree.

This only started yesterday but it seems like an age already. But I never once expected them to compensate me £60,000, or indeed £100,000+ as the real number is. I will put back as much as I can and will be left somewhere between £2,000 and £10,000 out of pocket. 

My contention is if I can't ask my SIPP provider the 'rules' for accessing my SIPP then who should I ask? In your example above you state 'Member could have worked out for himself' surely if you go to the very place that should know and get such a conclusive response then is there really an onus on the individual to ask elsewhere? How many is enough? No, I think  I think they have to be held responsible

Your LTA example may be relevant I don't know. I am not refusing/declining to repay the money I simply don't have it (all). The subtly perhaps is that the ruling (incorrectly applied as my SIPP had crystallised) is for someone who is at the end of life. It therefore follows that once paid then it's fairly reasonable that those funds would be consumed, partly if not in full.

The extent of compensation that the Ombudsman awards is interesting, I thought I read that they had made awards in the tens, even hundreds of thousands. If not then I may well be defeated in which case (and if still able) I will do my utmost to have the case taken up by one of the financial journalists       

eskbanker

Culzean said:

I assumed the Ombudsman was within the regulatory framework but I've just discovered that he is not

It depends on what you mean by 'within the regulatory framework'?

The FCA delegates consumer complaints handling to the FOS, whose remit is clearly defined within the same legislation that governs the role of the FCA, and there is interaction between the bodies:

The FCA is the regulator of most financial services in the UK. It's responsible for regulating the conduct of businesses and setting rules for businesses to follow, including the rules on how financial businesses handle complaints.

We work closely with the FCA, although we’re independent in the way we investigate and decide cases. We work with the FCA in three areas:

1. Governance – as the industry regulator, the FCA publishes our official rules and appoints our chairman and board of non-executive directors.
2. Responding to regulation – by understanding any changes the FCA makes to regulations, we make sure we’re ready for any changes in the type and number of complaints we receive.
3. Information sharing – we share information with the FCA so that both organisations can work effectively. We also share any trends and common problems we see that could inform future regulation.

Our joint memorandum of understanding provides a framework for how we work together.

Wider Implications Framework

The Wider Implications Framework is a way that members of the regulatory family work with each other, and other parties as appropriate, on issues that could have a wider impact across the financial services industry.

You can find out about the role of the Wider Implications Framework in guiding cooperation between members of the regulatory family on the FCA’s websitehttps://www.fca.org.uk/about/wider-implications-framework.

https://www.financial-ombudsman.org.uk/who-we-are/work-other-organisations

Culzean said:

The extent of compensation that the Ombudsman awards is interesting, I thought I read that they had made awards in the tens, even hundreds of thousands.     

There's a distinction between 'compensation' and actually correcting financial errors, the larger sums will be the latter.