Huge debt notices a cash drain on UK plumbing businesses

Tayside tradesmen lead fight to reshape the law after being hit with crippling financial liability

Tayside plumbers are leading the battle against crippling debt notices issued to business owners across the UK.

Plumbers throughout Britain have been hit with bills by Plumbing Pensions UK Limited (PPUK) as it looks to recover orphan debts to pay the pensions of plumbers whose employers had been in a pension plan which then folded.

Affected businesses and retired plumbers have been hit with potentially crippling Section 75 debt notices, some of which amount to more than £1 million.

The eye-watering bills are legally issued but business owners across the country feel it is unfair they should have to bail out PPUK, particularly as many were advised to join the scheme through being members of the industry body Snipef.

Perthshire plumber Fraser Lawrence unknowingly triggered liability for the payments when he upgraded his business from a partnership to a limited company in 2011.

After hearing about the potential to be charged catastrophic bills, he had to pay around £7,000 for comprehensive legal advice to protect his home and savings.

In order to help plumbers across the UK, he and others launched the

Plumbing Employers Action Group (PEAG).

He said: “In 2005, the government changed the law on pension schemes. PPUK should have informed us what was going on but we were not told about this until 2016.

“In 2011, we became a limited liability partnership, which was fine until 2016 when most companies involved got a letter from PPUK, stating you could be liable for these orphan debts.

“It’s all coming to light now that PPUK is wanting millions of pounds of what’s known as orphan debt, for companies which have gone out of business.

“It’s known as a ‘last man standing scheme’ so the last business left in PPUK would be responsible for all the remaining debt.”

Mr Lawrence began his campaign against the extortionate bills by rounding up as many plumbers across the country to set up PEAG, tracking down more than a dozen across Tayside and Fife.

PEAG have taken their fight to Westminster and are now calling on significant legislative changes to protect plumbers across the country after an Inverness businessman was hit with a £1.2m bill by PPUK in October.

With enormous debt now tied to his company, Mr Lawrence’s business is “unsellable” and he will have to close it when he wants to retire.

Auchterarder plumber Ray Smith, who does not have the same legal cover, fears his family will be liable for the debts if he dies.

He said: “As a sole trader, l’m personally liable for the debt. The only way out of paying this debt is to become insolvent but – if I die solvent – my family could be liable.

“We need legislative changes to stop this now. My estimated debt to PPUK is around £130,000, but this is only going to be rising.

“There is no debt due by any employer, all pension contributions are paid up to date and the scheme is fully funded.”

PEAG spokesperson Garry Forster added: “It cannot have been the intent of parliament to bankrupt ordinary people nor render their businesses worthless when all they have done is the right thing in enrolling their employees in this pension scheme.”

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It cannot have been the intent of parliament to bankrupt people. GARRY FORSTER

Plumbers throughout Britain have been hit with huge bills.