HM Treasury has been asked to give a tax amnesty to a group of 500 pension scam victims, who lost savings to the tune of £20m.
Margaret Snowdon, chairwoman of the Pension Scams Industry Group, told FTAdviser she has submitted this request to the government, as the victims weren’t aware that the schemes they transferred their pensions to weren’t valid.
The case involves pension scams conducted between 2006 and January 2014.
In 2006 pensions tax simplification came into effect and HM Revenue & Customs introduced automated approval of pension schemes, and by 2014 The Pensions Regulator had started issuing the Scorpion leaflet as part of a pension scam campaign which asked trustees to conduct due diligence checks on pension transfer requests to ensure the member wasn’t being scammed.
The problem these scam victims faced was that if a pension scam involved a pension transfer ahead of the statutory minimum pension age, they were charged an unauthorised access tax charge of 55 per cent.
Ms Snowdon said: “It’s cruel because these people didn’t transfer to get scammed. These were schemes registered with HMRC with registered advisers.
“How were these individuals to know they weren’t legitimate?”
An HMRC spokesperson said: “HMRC will always consider proposals to conclude disputes. Where these affect multiple individuals or concern large amounts they are considered by a senior panel.”
Paul Gibson, managing director at Granite Financial Planning, noted that it "seems inherently unfair that those scammed are now also facing potential tax bills.
"Hopefully common sense will prevail and the victims will be protected," he said.
PSIG, the voluntary body set up to support trustees, providers and administrators in combating pension scams, published the second version of its code for combating pension scams in June.
While the real value of money lost in pension fraud is unknown, Ms Snowdon has suggested that pension savers have lost more than £1bn to scams.
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