A change in the pension scheme registration form sent by HM Revenue & Customs (HMRC) to providers is delaying the process of setting up a small self-administered scheme (Ssas) by up to a week-and-a-half, Dentons Pension has warned.
Since the beginning of April, the taxman has included a request for a letter of appointment signed by the scheme trustees, alongside a copy of the agreement signed by the scheme administrator and the trustees – in addition to all the other information previously required.
According to Martin Tilley, director of technical services at Dentons, this change means that Ssas providers have now to update their procedures to comply with this demand, which will slow down the registration process.
He said: "Hopefully most practitioners will have the document now required, already as part of their establishment documents, but if not they will have to change their procedures to ensure they do have it and incorporate it within their new establishing documentary procedures."
Mr Tilley agrees with the introduction of the new requirement, which will put "more onus on the members and trustees, that they understand the scheme that they are setting up".
HMRC is increasing the administrative burden on new schemes in an effort to combat scams, after the government announced new rules last year to prevent fraud in pensions.
Mr Tilley added: "Advisers should be aware of the timescales, when advising their clients on establishment of Ssas, and also that HMRC can review their processes and amend their information collection requirements at any time under section 153A of Finance Act 2004.
"No doubt as HMRC continue to develop their processes to prevent the registration of Ssas' potentially to be used for scam investments and liberation we may see more changes in the future."
Since 6 April, the taxman also has new discretionary powers to de-authorise schemes that do not have an underlying sponsoring employer.
Once de-registered, schemes are classed as taxable trusts and face an immediate 40 per cent tax charge and up to 30 per cent additional charges subject to circumstances.
maria.espadinha@ft.com
