What is this about?

The Ark pension scheme is an example of how people who were victims of pension or investment abuse can later be treated by the state as if they were deliberate tax avoiders — with devastating consequences.

This explainer sets out, in simple terms, what happened, why people are being charged tax many years later, and why we believe this raises serious public interest concerns.

________________________________________

What was the Ark pension scheme?

Ark was one of several occupational pension schemes set up to defraud the public, Members joined it in good faith, believing:

•            their pension savings were locked in a UK pension scheme until retirement with a high level of return 

•            trustees and scheme managers -controlled investments; and arranged loans to third parties 

•            the scheme complied with UK pension and tax rules and was registered with HMRC/TPR 

•            The scheme sold by regulated financial advisors 

Members did not expect to receive early access to their pension savings, but that they would receive a separate loan to be repaid later.

________________________________________

What went wrong?

 Serious problems emerged at scheme level

The Ark determined to be a fraud on the power of investment in high Court J Bean and poor governance. 

•            misuse of scheme funds; and investments were highly illiquid & offshore, trustees were forcibly replaced by the Pension Regulator 

Some of these transactions were later described by tax authorities as “loans to members,” even though many members say:

•            they never asked for a loan.

•            they never received cash.

•            they never signed loan paperwork; and

•            they were unaware anything unusual had happened or involved in Trustee decisions

________________________________________

Why are members being charged tax now?

 HM Revenue & Customs reclassified historic scheme transactions as “unauthorised payments” under UK pension tax law.

That triggered:

•            a 40% tax charge.

•            an extra 15% surcharge in some cases.

•            tax on “notional interest” unpaid on loans 

•            and many years of compound interest.

These rules were designed to punish deliberate early access to pensions, not to deal with fraud or abuse by scheme controllers.

________________________________________

Why is this controversial?

Because most Ark members:

•            did not choose to access their pension early – they thought they were getting a separate loan.

•            “loans” have been repaid or deducted so any personal financial benefit is negligible; and

•            could not have prevented or corrected what happened.

•            Regulated advisors recommended the scheme 

Yet they are being taxed as if they deliberately withdrew their pensions early.

In some cases, the same transaction has been taxed:

•            on the member who “received “the loan.

•            On the member who “made” the loan; and

•            on the scheme itself.

raising concerns about multiple taxation of the same event.

Why did it take so long?

Many members only learned of the extent of the alleged tax liabilities 0–15 years later. During that time:

•            interest continued to accrue.

•            records became harder to access; and

•            people had no chance to mitigate or challenge issues when they occurred.

As a result, tax bills are often much larger than the original loan value.

________________________________________

What impact has this had on people?

Affected members report:

•            bankruptcy concerns.

•            potential loss of homes.

•            severe stress and mental health harm.

•            hospitalisations

•            inability to retire.

Similar issues have been highlighted in other investment and pension cases, including those featured in a recent BBC documentary about former professional footballers, the V11.

________________________________________

Why is this a public interest issue?

This raises wider questions about:

•            fairness: should victims of fraud be treated like deliberate tax avoiders?

•            value for money: is it sensible to spend public funds pursuing people into insolvency many years later?

•            priorities: why do individuals face aggressive enforcement while those who designed and promoted schemes are less targeted?

________________________________________

Why does this matter now?

Enforcement of tax liabilities is expected to begin in early 2026. This will have a devastating impact on victims. 

The government has committed significant new funding to HMRC to increase tax enforcement and close the tax gap.

If cases like Ark reflect how enforcement works in practice, there is concern that:

•            additional funding may be used to pursue historic, contested cases against individuals.

•            rather than focusing on deliberate wrongdoing and those who profit from it.

How Ark is handled therefore matters not just to past victims, but to future savers and taxpayers.

________________________________________

The key question



How should the system distinguish between people who deliberately avoid tax and people who were misled or abused within pension and investment schemes?

The answer will shape trust in pensions, tax enforcement, and public institutions for years to come.

________________________________________

Further evidence, anonymised case studies, and expert commentary are available for parliamentarians, ministers, policymakers, journalists, and oversight bodies on request.