HMRC given more powers over pension scams

HMRC given more powers over pension scams

Stricter legislation to stop scammers operating fraudulent pension schemes will come into effect in 6 April 2018.

According to a policy paper published today (13 September), the measures will see more powers handed to HMRC to allow it to act to stop people losing their money to pension scammers.

Under the new supervision regime, the taxman's ability to refuse to register, and to de-register pension schemes, will also include master trusts which do not have authorisation from The Pensions Regulator.

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Master trusts are a type of workplace pension scheme which have become increasingly popular since millions more workers were brought into the pension market as part of auto-enrolment.

HMRC will also be able to de-register those schemes with a dormant company as a sponsoring employer.

The changes are part of a range of measures to protect people's retirement pots after a radical liberalisation of the pension market was introduced by the government two years ago, known as pension freedoms.

Legislation on HMRC's news powers and the other measures on pensions will be introduced in the winter Finance Bill 2017, which will be published after the autumn budget, to be announced on 22 November.

The new rules, which were presented in the government’s consultation response on pension scams, has the goal to widen the circumstances in which HMRC may refuse to register a pension scheme.

The purpose of the measure is to make the HMRC tax registration regime even more effective at preventing fraudulent pension schemes.

The new rules are also linked to the update of the tax regime for pension providers using the master trust model, which was announced in the last spring budget.

The goal is to align HMRC policies with The Pension Regulator’s new authorisation and supervision regime for this sector.

This policy paper is one of a series of documents being published by HMRC and HM Treasury, as the government starts to publish drafts of some clauses that it plans to introduce in the next Finance Bill.

Since the next Finance Bill will be the third of the year, due to the June elections, there will be fewer clauses than in recent years.