A taxpayer was liable to an unauthorised payment charge and surcharge in respect of a loan from his pension fund and a penalty for carelessness in failing to declare the unauthorised payment on his tax return.

In February 2005, the appellant started his own business. In early 2010, aged 47, the appellant had no assets apart from money held in a pension scheme. He wanted to raise money to invest in his business. The appellant searched on the internet for pension loans. He found a firm (IQBS) who said they could arrange loans against pension funds. A representative of IQBS explained that it had successfully arranged loans for hundreds of other people. 

In February 2011, the appellant entered into an agreement put forward by IQBS to open up a SIPP, transferred his entire pension fund (totalling £172,000), purchased 172,000 shares of £1 each in a company (KJKI) and