In Young, on behalf of the T-Mobile (UK) Pension Scheme, the PPF Ombudsman rejected a complaint from scheme trustees that the PPF failed to consider "relevant factors" in deciding not to review the scheme's levy invoice.
In particular, the trustees argued that the PPF failed to consider the effect of the increase in the levy scaling factor (broadly, the factor used to allocate the total levy required by the PPF in any given year across all eligible schemes) from its "indicative" level (that is, the estimate published by the PPF to give an indication of the likely amount) when compared to its final level. This, coupled with the "late" publication of the actual levy scaling factor, "potentially made it impossible for [the trustees] to predict the levy in advance and to consider what proportionate steps ought to be taken …to mitigate the amount of the estimated levy."
The PPF Board ought to have recognised that the trustees would, to some extent, have relied on the indicative scaling factor when undertaking financial planning and was, therefore, under a duty to take reasonable care to ensure that the indicative scaling factor was as accurate as possible.
In further representations, the trustees also argued that the concept of "equitable liability" meant that, if the levy invoice could not be changed, the PPF Board could, on the grounds of fairness, decide not to pursue the full amount. They also noted that if trustees could not reasonably rely on the indicative scaling factor when engaged in financial planning, then it served no useful purpose.
Whilst expressing "some sympathy" with the argument that there is no purpose in producing an indicative figure that bears little resemblance to the final figure, the PPF Ombudsman was of the view that it was "unsound" of the trustees to have relied completely on the indicative scaling factor, especially as it was published with a clear indication that the actual factor could be different.
On the issue of "equitable liability", the PPF Ombudsman drew parallels with its use in HMRC matters and noted that the concession was originally introduced to protect other creditors' claims when HMRC's claims took precedence in insolvency. This was not a relevant consideration in this case.
The outcome follows a long line of levy appeals which have been rejected by the PPF Ombudsman and once again demonstrates the difficulty of challenging or overturning a levy invoice once it has been set. It is worth noting, however, that the PPF has changed its policy for the future and published the final levy scaling factor for the levy year 2009/10 well in advance.