The time taken to register small self administered schemes with HM Revenue & Customs has been cut from months to weeks, FTAdviser has learned.
Last year (April 2018), financial advisers told FTAdviser that the registration of new Ssass was taking more than three months.
This caused problems if the Ssas was being established as a recipient of a defined benefit transfer because the cash equivalent transfer value provided by scheme trustees was only valid for three months.
But FTAdviser has been told that in recent months Ssas registration times have dropped from taking months to weeks.
HMRC changed its process for new pension scheme registration applications in 2013.
Since then applications have been fully risk assessed before a decision is made on whether or not to register the scheme.
The Finance Act 2014 also contained a number of changes to combat pension liberation, including new powers to enquire into new registrations where HMRC suspects the scheme is involved in liberation.
Only once the scheme has been formally registered can contributions be made to it.
HMRC then created a platform to allow Ssas administrators to apply to register pension schemes online, however this was not expected to quicken the registration process.
Stephen McPhillips, technical sales director at Dentons Pension Management, said: "Our recent experience of registering new Ssass with HMRC is that the process can be completed within 6 weeks.
"However, whilst timescales have come down a little from those experienced over the past couple of years, we would still advise clients to expect up to three months, or sometimes longer."
Others have had similar experiences.
Martin Tilley, pension director at Hurley Partners, said the firm had submitted a Ssas scheme for registration in February and received formal registration exactly three weeks after the initial submission.
He said: "Hopefully this is a sign that HMRC now have the appropriate resources to deal with clean registration requests now.
"It may also be that they have reinstated their ‘white list’ of practitioners from who they conduct a lighter touch on registrations in the potential knowledge that the practitioner has done their own due diligence on the company, which appeared to operate up until around 24 months ago."
The same was found with members of the Association of Member-Directed Pension Schemes committee who have Ssas businesses.
Chairman of the committee, Claire Trott, said: "It is all very positive and [individuals] said that they have seen a dramatic reduction in the time it takes to register a Ssas from months to weeks.
"Everyone is still cautious so they don’t over promise their clients though as timing can be key to completing investments, such as property purchases."
HMRC has also been better at engaging and updating advisers on the progress of its Ssas registrations, some said.
Richard Prior, director at Mercer, said: "The registration process for the last two schemes we received was far quicker than previous cases last year.
"We have noticed HMRC are now more pro-active in terms of their engagement with us as a provider and professional trustee and we are no longer having to regularly chase them for progress updates."
But McPhillips warned that the new timing should not be treated as the default for all Ssas registrations.
He said: "We do not know the extent of the background checks that HMRC needs to undertake on any given new Ssas registration and so we alert advisers and clients to the fact that we cannot control that process, other than to comply in a very timely manner with HMRC's information and documentation requests, which can change."
AN HMRC spokesperson said: "We continue to make the necessary checks to ensure that only legitimate pension schemes obtain registration for tax relief purposes."
amy.austin@ft.com
