Vanguard Asset Management, Ltd · DRN-6218518

The complaint Mr W has complained that Vanguard Asset Management, Ltd sent him a payslip after he’d made a withdrawal from his pension plan which showed the wrong amount of tax deducted from his withdrawal and then submitted this wrong tax information to HMRC. What happened Mr W holds a Self-Invested Personal Pension (SIPP) with Vanguard Asset Management, Ltd (Vanguard). In October 2024 Mr W contacted Vanguard and requested a withdrawal of the remaining balance of £72,670.57 from his SIPP. On 16 October 2024, which was before Mr W had completed his pension withdrawal, Vanguard sent him a P45 which showed his “Total pay this employment” as £145,380.29 and “Total tax this employment” of £58,152.00. This information was wrong. Vanguard then sent Mr W a payslip for his pension withdrawal which showed a pay date of 17 October 2024. The payslip stated that the gross amount paid to Mr W through flexi- access drawdown was £72,709.72 and that an Income Tax deduction of £21,750.06 had been made. The payslip also showed that the net payment Vanguard had paid to Mr W was £50,959.66. However, the payslip was wrong and should have shown the correct amounts that had been paid to Mr W by Vanguard. This was a gross drawdown amount of £72,670.57, a net payment of £41,590 and a deduction of £31,080.15 for Income Tax. Mr W contacted Vanguard to complain about the wrong information contained in the payslip and P45 which had been sent to him. In November 2024 Vanguard sent Mr W a new payslip which this time contained the correct information about his SIPP withdrawal. On 4 December 2024 Vanguard also contacted Mr W to tell him that it had sent him this new correct payslip. Mr W contacted Vanguard again in April 2025 to say that he’d received correspondence from His Majesty’s Revenue and Customs (HMRC) telling him that he owed Income Tax of £10,564 and asked Vanguard to investigate why he’d received this tax demand. Mr W has said that of this Income Tax liability, HMRC told him that £9,330 was the difference between the incorrect Income Tax figure of £21,750.06 that Vanguard reported to HMRC and the correct Income Tax figure of £31,080.15. Mr W has said that the remainder of this tax liability was for other sundries. Mr W then complained to Vanguard as he wasn’t happy about the time it was taking it to respond to his original query.

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On 9 June 2025, Vanguard sent Mr W a Statement of Earnings for the 2024/25 tax year. This Statement contained correct information about Mr W’s SIPP withdrawal. Vanguard also told Mr W that as the 2024/25 tax year had closed then it wasn’t able to re-issue a correct P45 to him, but it sent him a correct P60 End of Year certificate for the 2024/25 tax year instead. Vanguard also told Mr W that he could submit these documents to HMRC to evidence the SIPP withdrawal he’d completed in October 2024 and the correct amount of Income Tax that Vanguard had deducted from his payment. However, Mr W thought that he shouldn’t need to contact HMRC to correct Vanguard’s mistake. Instead, he thought that Vanguard should contact HMRC to explain the error it had made. On 29 July 2025 Vanguard responded to Mr W’s complaint. It said that after sending Mr W an incorrect P45 and payslip in October 2024 it had then re-issued a corrected payslip to Mr W in November 2024. Vanguard went on to say: “However, despite us correcting this at the time within your documents, you were required to get back in touch with us in April as you were notified by HMRC you owed an amount of £10,564.00. Subsequently this meant we hadn’t notified HMRC of the error we caused at the time, and it’s very disappointing to see this wasn’t done until June when we produced a Statement of Earnings Document and P60 for you and reported this separately via the ‘Real Time Information’ system.” Vanguard added that it hadn’t provided Mr W with an acceptable level of service. To compensate Mr W for its error, and for the inconvenience this had caused, Vanguard paid him £200 plus £50 in compensation for the length of time it had taken to deal with Mr W’s complaint, so a total of £250. In September 2025 Mr W contacted Vanguard again to say that he’d spoken with HMRC and had been told that his Income Tax liability for 2024/25 was still being assessed using information contained in the first, incorrect payslip that Vanguard had issued in October 2024. Mr W asked Vanguard to contact HMRC to provide it with the correct tax information on his SIPP withdrawal. On 25 September 2025 Vanguard says it sent HMRC an End of Year statement which set out the correct information on Mr W’s pension withdrawal. In November 2025 Mr W received another letter from HMRC which said that he still had an outstanding Income Tax liability of £10,681.23 and that this amount had to be paid by 31 January 2026. Mr W paid this Income Tax liability to HMRC before the deadline. Mr W wasn’t happy with the response he’d received from Vanguard to his complaint, so he decided to bring this to the Financial Ombudsman Service. One of our Investigators reviewed Mr W’s complaint. Our Investigator’s view was that Vanguard had done what they would expect it to do to correct the error it made in October 2024. Our Investigator also thought that Vanguard had now reported correct information on Mr W’s SIPP withdrawal to HMRC and had provided Mr W with a correct payslip, P60 End of Year certificate for the 2024/25 tax year and a Statement of Earnings. Our Investigator also thought that the compensation that Vanguard had paid to Mr W for the distress and inconvenience its error had caused was reasonable. Therefore, our Investigator concluded that Vanguard didn’t need to take any further action in respect of Mr W’s complaint. Mr W didn’t agree with our Investigator’s view. He maintained HMRC hadn’t received any of the information Vanguard said it had submitted. Mr W asked for his complaint to be considered by an Ombudsman.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In its response to Mr W’s complaint, Vanguard said: “We haven’t provided an acceptable level of service from the outset and for that I’m very sorry”. Vanguard then said it would pay Mr W compensation of £200 for the distress and inconvenience its error had caused and £50 for the time it took to deal with his complaint, so a total of £250, as I’ve detailed above. I therefore don’t think that there’s any dispute between the parties in this complaint that Vanguard didn’t provide Mr W with an acceptable level of service. Following Mr W’s complaint, Vanguard took action to try and rectify its error. It has provided Mr W with documentation which showed the correct amount of tax paid deducted from his SIPP withdrawal, for Mr W to present to HMRC. Vanguard has said that it also sent information directly to HMRC on Mr W’s behalf to set out the correct tax information. However, Mr W has said that these actions aren’t sufficient to resolve his complaint. I think it would be useful here to reflect on the role of this Service. This Service isn’t intended to regulate or punish businesses for their conduct. Instead, this Service looks to resolve individual complaints between a consumer and a business. Should we decide that something has gone wrong we would ask the business to put things right by placing the consumer, as far as is possible, in the position they would have been in if the problem hadn’t occurred. I will therefore consider the actions that Vanguard has taken to address Mr W’s complaint. As I’ve said above, the gross SIPP withdrawal completed by Mr W in October 2024 was for £72,670.57. Vanguard deducted £31,080.15 from Mr W’s SIPP withdrawal in respect of the Income Tax liability due. After Mr W had contacted Vanguard to tell it that the information in his payslip was wrong it sent him a new payslip In November 2024 which contained the correct information about his SIPP withdrawal. This correct payslip showed that Vanguard had deducted £31,080.15 from Mr W’s SIPP withdrawal. Then on 4 December 2024 Vanguard contacted Mr W to tell him that it had sent him this correct payslip which Mr W could send to HMRC to confirm the amount of tax he’d paid on his SIPP withdrawal. On 9 June 2025 Vanguard sent Mr W a Statement of Earnings for the 2024/25 tax year which contained correct information about his SIPP withdrawal. Vanguard also sent Mr W a P60 End of Year certificate for the 2024/25 tax year and told him that he could submit this and the Statement of Earnings to HMRC to evidence the amount of Income Tax that Vanguard had deducted from his withdrawal payment. I’ve seen the above documents which Vanguard sent to Mr W and can see that each document contains the correct tax information for his SIPP withdrawal. When Vanguard sent these documents to Mr W it sent him a message to say that he could send them to HMRC as evidence of the correct SIPP income he’d received in October 2024 and the correct Income Tax deducted.

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I therefore think that to try and rectify its error, Vanguard sent Mr W a correct payslip, a Statement of Earnings for the 2024/25 tax year and a P60 End of Year certificate for the 2024/25 tax year. I therefore think it’s reasonable to conclude that by June 2025 Mr W had correct documentation that he could send to HMRC to evidence the amount of Income Tax he’d paid on his SIPP withdrawal. However, Mr W didn’t send any of the documents he’d received from Vanguard to HMRC at that time as he thought that Vanguard should correct its error. In September 2025 Mr W told Vanguard that it should contact HMRC and send it the correct tax information. In response Vanguard has said that on 25 September 2025 it sent HMRC a 2024/5 End of Year Update on Mr W’s behalf and that this contained the correct tax information on Mr W’s SIPP withdrawal. However, Mr W has told this Service that Vanguard didn’t send this End of Year Update to HMRC. Vanguard has sent this Service a screenshot of its communication with HMRC. Vanguard has said that this screenshot provides evidence that it did send the End of Year Update to HMRC in September 2025. From this screenshot, I can see that HMRC responds to Vanguard to say that it received Vanguard’s communication on 25 September 2025. I think it’s reasonable to conclude from this screenshot that Vanguard did communicate with HMRC about Mr W’s SIPP on 25 September 2025. However, Mr W has also sent this Service a copy of a letter he received from HMRC dated 18 February 2026. This letter contains a table which records that Mr W had only paid tax of £21,750 on his Vanguard SIPP withdrawal, and not the correct figure of £31,080.15. I therefore think that regardless of whether Vanguard had sent an End of Year Update to HMRC in September 2025, HMRC’s records were still showing £21,750 as the amount of tax paid on Mr W’s SIPP withdrawal when it wrote to him in February 2026. As I’ve said above, this Service looks to resolve individual complaints between a consumer and a business and if we decide that something has gone wrong, we will ask Vanguard to put things right by placing Mr W, as far as is possible, in the position he would have been if the problem hadn’t occurred. Therefore, whilst Vanguard made an error by producing an incorrect payslip for Mr W’s SIPP withdrawal and sending wrong information to HMRC, I think that the action that Vanguard took to correct its error by sending correct documents to Mr W was reasonable. Once Mr W had received these correct documents, firstly in November 2024 and then in June 2025, I don’t think it would’ve been unreasonable for him to have then submitted these documents to HMRC to evidence the amount of tax he’d paid on his SIPP withdrawal. I appreciate that Mr W asked Vanguard to send correct documentation directly to HMRC in September 2025. Vanguard has said that it did this, whilst Mr W maintains that Vanguard didn’t send HMRC the correct information. But I think that Mr W could also have sent HMRC the correct documentation he’d received from Vanguard in June 2025, as evidence of the correct amount of tax that had been deducted from his SIPP withdrawal and to correct his tax position. Mr W has told this Service that he has now sent the corrected withdrawal payslip and the P60 for the 2024/5 tax year to HMRC. Mr W has said that he sent this on 10 February 2026. Mr W has however said that he hasn’t sent HMRC the Statement of Earnings for 2024/5 that Vanguard sent him. As the correct documents were sent to Mr W in November 2024 and June 2025, then I also think that these documents were sent some months before 31 January 2026, when Mr W was told he had to pay his Income Tax. I therefore think that Mr W had sufficient time to

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submit his documents to HMRC before 31 January 2026, so that he could have then asked HMRC to correct his tax position before this deadline. I also don’t think it would be reasonable to conclude that Vanguard is responsible for Mr W not sending any of the correct documents he had to HMRC. I therefore think that Vanguard sent Mr W documents which showed the correct amount of Income Tax he’d paid on his pension withdrawal and explained what he could send the documents to HMRC as evidence of the tax he’d paid on his SIPP withdrawal. I therefore think that the actions taken by Vanguard by June 2025 to try and rectify its error were fair and reasonable. Mr W has also said that because of Vanguard’s error his tax code was changed so that HMRC could claim the above tax liability of £9,330 from his monthly income. Mr W has further said that because of Vanguard’s error his net monthly income was then reduced and that he’s suffered a financial loss as a result. But Mr W has said that HMRC told him that of the total payment of £10,681.23 he had to make before 31 January 2026, £9,330 was the outstanding tax it said was due on his SIPP withdrawal. I therefore think it’s reasonable to conclude that any adjustment made to Mr W’s tax code wouldn’t have been to collect any tax from his SIPP withdrawal, as HMRC had instead told Mr W that the total liability its records showed outstanding of £9,330 needed to be paid as a single sum before 31 January 2026. I’ve also not seen any evidence to show that HMRC intended to collect this amount of £9,330 by reducing Mr W’s net monthly income. Mr W has also claimed that Vanguard’s error caused him distress and inconvenience and that he’s had to spend time on telephone calls with both Vanguard and HMRC. I also think it’s reasonable to conclude that Vanguard’s error in producing an incorrect payslip and reporting an incorrect tax deduction will have caused Mr W some distress and inconvenience. Vanguard has already paid Mr W compensation of £250. Of this, Vanguard paid Mr W compensation of £200 for the distress and inconvenience its error caused. The balance of £50 was paid in compensation for the length of time it had taken to deal with Mr W’s complaint. I think that an award of £200 for the distress and inconvenience suffered by Mr W might be suitable where Vanguard made repeated small errors, or a larger single mistake, which then required a reasonable effort from Mr W to sort out. Typically, Vanguard’s actions could have resulted in some acute stress lasting hours at the lower end or have had a milder impact across a few days, or even weeks. I think that an award of this amount would be reasonable where either some inconvenience had been caused, or lower levels of distress, disappointment and loss of expectation. I think that this is a fair description of the inconvenience Vanguard’s error caused Mr W. I say this because Vanguard did make a larger single mistake, when it sent Mr W an incorrect payslip and P45 in October 2024, and then reported wrong information to HMRC. I think that this error would likely have caused Mr W acute stress and would have had an impact upon him until he was sent correct documents by Vanguard in November 2024 and June 2025. I therefore think it’s reasonable to conclude that the compensation that Vanguard has paid Mr W is fair in this case. I therefore conclude that the actions taken by Vanguard to correct its error are fair and reasonable, and as a result, I’m not asking it to do anything further. I am therefore unable to uphold Mr W’s complaint.

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My final decision My final decision is that I don’t uphold Mr W’s complaint against Vanguard Asset Management, Ltd. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 26 May 2026. Ian Barton Ombudsman

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