Sipp provider wins HMRC appeal

Sipp provider wins HMRC appeal

Sippchoice has successfully appealed a decision taken by HM Revenue & Customs.

The tax office forced the provider to pay a charge for payments made to clients who took money out of their self-invested personal pension (Sipp).

HMRC had considered a loan payment that Sippchoice had made to a number of clients as unauthorised and forced the provider to pay a fee, which the provider subsequently appealed.

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Sippchoice managing director Hyman Wolanski said the company was charged a scheme sanction fee by HMRC because of loans that had been made to members of the provider’s Sipp, unknown to the company.

These loans were held to be made in connection with the investments made by their pension funds.

“As a consequence of that HMRC treat those loans, albeit they’re nothing to do with the pension fund directly, as if they were made by the pension fund to the members and therefore the loans are unauthorised payments,” Mr Wolanski said.

“It’s quite an odd situation. It’s a deemed payment from the pension fund, not an actual one.”

Registered pension schemes are allowed to make payments to scheme members, but if HMRC deems the payment to be unauthorised then it can impose a 40 per cent charge to income on the pension scheme provider.

Court documents stated the scheme sanction charges at issue in this case arose out of an alleged pensions liberation scheme, which allows members of a pension scheme to access their pension funds as a loan before age 55.

The scheme aimed to allow individuals access to their savings without being subject to a tax charge under the unauthorised payments regime.