HMRC cracks down on scheme administrators

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HMRC cracks down on scheme administrators

Pension scheme administrators will be forced to provide HM Revenue and Customs additional information and declarations online as part of their crackdown on pension liberation, the Revenue said.

To be a pension scheme administrator, HMRC must regard you as a ‘fit and proper’ person. If HMRC considers it necessary to make further enquiries, it has the power to request further information.

In its pension liberation newsletter, HMRC said that building on the ‘fit and proper’ person declarations, scheme administrators themselves will be required to provide it with additional information and declarations online and may be asked to produce further information and documentation as a result.

“This builds in additional safeguards to ensure that people running pension schemes together with the people who offer them advice are doing so wholly and mainly for the purpose of making authorised payments of pensions and lumps sums in line with the pension tax rules,” HMRC stated.

In addition, to help prevent a scheme being set up legitimately, then changing its structure to become a scheme that is more likely to be the target of pension liberation, HMRC has amended the information that must be provided when a scheme changes its structure, range, or number of members.

This will take effect from April 2015.

This follows on from September’s announcement that if HMRC believes a pension scheme administrator is not a fit and proper person it can refuse to register a new pension scheme and de-register an existing registered pension scheme.

HMRC has now unveiled the factors that may lead to scheme administrators not being a fit and proper person.

These include:

• not having “sufficient working knowledge” of the pensions and pensions tax legislation to be fully aware and capable of assuming the duties and liabilities of the scheme administrator, or does not employ an adviser with this knowledge;

• has previously been involved in pension liberation;

• has previously been the scheme administrator or involved with a pension scheme which has been de-registered by HMRC;

• has been involved in tax fraud or other fraudulent behaviour including misrepresentation and/or identity theft;

• has a criminal conviction relation to finance, dishonesty or corporate bodies;

• has been the subject of adverse civil proceedings relating to finance, corporate bodies or dishonesty/misconduct;

• has participated in or been connected with designing and/or marketing tax avoidance schemes;

• employs as an adviser a person who has been involved in pension liberation or tax avoidance;

• has been removed from acting as a trustee of a pension scheme by The Pensions Regulator or a court, or has otherwise seriously contravened the pensions regulatory system, or the regulatory system of any other professional/governmental regulatory body; and/or

• has been disqualified from acting as a company director or are bankrupt.

ruth.gillbe@ft.com, donia.o’loughlin@ft.com