Not upheld: failure to pay tax charge; poor customer service and delayed responses complaint against James Hay Administration Company Limited

Decision detail

Summary

Mr S complained to the FOS that James Hay Administration Company Limited failed to pay a Lifetime Allowance tax charge of £61,111.13 arising from a pension withdrawal in 2018, which was only identified as unpaid in 2019 and communicated to him in November 2020. Mr S complained in July 2025, arguing James Hay should share liability for the tax and that the delay caused financial strain and distress. The ombudsman found the substantive complaint was raised outside jurisdiction (more than six years after the benefit crystallisation event and more than three years after Mr S became aware of the issue via the November 2020 letter). The customer service complaint regarding delayed responses was within jurisdiction but not upheld, as the £450 compensation already paid was deemed sufficient. The ombudsman emphasised the tax was Mr S's personal responsibility and that he could have verified the position himself before transferring funds to another provider.

The Ombudsman's reasoning

The ombudsman found that Mr S's substantive complaint about James Hay's failure to pay the tax charge was raised outside the FOS jurisdiction. Under DISP 2.8.2R, complaints must be raised within six years of the event complained of (the benefit crystallisation event on 7 November 2018, expiring 7 November 2024) or within three years of when the complainant knew or ought reasonably to have known they had cause to complain. Although Mr S claims he was unaware in 2019, James Hay sent a message to his financial adviser on 21 November 2019 and a direct letter to Mr S on 10 November 2020 clearly stating the tax had not been paid. Mr S received the November 2020 letter and referred to it in his July 2025 complaint, establishing his awareness. Therefore, the three-year limit expired on 10 November 2023, before his February 2025 complaint. The customer service complaint regarding delays in responding to queries was within jurisdiction (first contact November 2020), but the ombudsman found £450 compensation already paid was sufficient given the delays, though regrettable. The ombudsman emphasised that the outstanding tax was Mr S's personal tax responsibility, not James Hay's, and that Mr S could have verified the position himself by checking his statements before transferring funds to Charles Stanley.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website