It has been widely reported in the financial press that from 6 April HM Revenue & Customs (HMRC) will be given new discretionary powers to de-authorise existing occupational pension schemes – which includes small self-administered schemes (SSAS) – that have a dormant company as a sponsoring employer.
These new powers have come into effect as a result of a consultation last year into pension scams and the role played by dormant companies that have been used to register pension schemes with HMRC to facilitate such scams.
However, while it is these headlines that have caught the attention, it is important to look through this potentially alarmist interpretation of what HMRC will do with its new powers, and focus on what HMRC has said in the past.
So, here it is: “Where an existing registered pension scheme has a dormant company as a sponsoring employer, HMRC would only de-register the scheme where there is clear evidence that it is not being used to provide legitimate benefits within the tax rules. HMRC does not use the existing power to de-register schemes lightly, and this will continue with the extended power.”
As both a responsible and reputable SSAS provider, Talbot and Muir only acts as scheme administrator and independent trustee to schemes that provide legitimate benefits to its members that are within the tax rules.
The comments from HMRC above will hopefully give reassurance to all legitimate SSAS that their scheme should not be caught as an unintended consequence of these new powers granted to HMRC.
Paul Darvill is administration and technical director at Talbot and Muir