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As HMRC are committed to combating pension liberation activity, it has changed the process involved in registering new pension schemes. HMRC has made the pension scheme registration process more robust by moving away from a process now, check later approach. Scheme registration will no longer be confirmed on successful submission of the online form.
This will enable HMRC to conduct detailed risk assessment activity before making a decision on whether or not to register a scheme. No contributions or transfer payments can be made to the scheme in this interim period without tax consequences until the registration has been verified.
Likewise HMRC have actually increased the information available to existing pension schemes when transferring to other schemes. In other words, if a pension scheme provider is concerned about where the scheme is being transferred to, it can contact HMRC for basic information.
In practice this has caused an outcry within the professional trustee market. There has been a call to return to the pre A-day status of only professional trustees being able to set up such pension schemes as a SSAS. This would mean that individual companies would protect their registrations and help remove some of the rogue companies operating in the liberation market.
Some of the members of our professional body, The Association of Member-Directed Pension Schemes (AMPS) have already started to experience delays where a request to register was made on the 21st October queries answered by the 30th October and still no registration is forthcoming. On contacting HMRC this individual was advised that no comment could be made nor any indication given to when the registration would be approved.
This time delay needs to be considered when registering new schemes as this could have serious implications, if for example, when looking to make company contributions prior to the company year end or the purchase of commercial property, when definitive time deadlines need to be met.
For more information on HMRC registration please visit the HMRC website via the following link http://www.hmrc.gov.uk/news/pensionliberation.htm or contact Kerry Houghton on 01772 550614 or email Kerry.Houghton@taypat.co.uk.