Not upheld: administrative error in tax reporting and documentation complaint against Vanguard Asset Management, Ltd

Decision detail

Summary

Mr W complained that Vanguard Asset Management issued an incorrect payslip and P45 for his SIPP withdrawal in October 2024, showing a tax deduction of £21,750.06 instead of the correct £31,080.15, and submitted this wrong information to HMRC. This resulted in Mr W receiving a tax demand from HMRC for £10,564 (including £9,330 relating to the underreported tax). Vanguard issued corrected documents in November 2024 and June 2025, and claimed to have reported correct information to HMRC in September 2025, but Mr W argued Vanguard should have proactively corrected the error with HMRC rather than requiring him to do so. The ombudsman found that Vanguard's corrective actions were reasonable and that Mr W had sufficient time and documentation to submit to HMRC before the deadline, therefore not upholding the complaint. Vanguard had already paid £250 in compensation.

The Ombudsman's reasoning

The ombudsman found that while Vanguard made a significant error in producing an incorrect payslip and reporting wrong tax information to HMRC, the firm took reasonable steps to rectify the error by providing Mr W with correct documentation (corrected payslip, Statement of Earnings, and P60 certificate) by June 2025. The ombudsman concluded that Mr W had sufficient time and correct documentation to submit to HMRC before the 31 January 2026 deadline, and therefore Mr W bore some responsibility for not proactively submitting these documents to correct his tax position. The ombudsman also found that the £250 compensation already paid by Vanguard (£200 for distress and inconvenience, £50 for complaint handling delay) was fair and reasonable for a larger single mistake requiring reasonable effort to sort out.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website