HMRC gets new powers to help in the fight against pensions liberation
As part of the budget, the Chancellor announced new powers for HMRC to help in its fight against pensions liberation, a concept discussed in our July 2013 edition.
If HMRC is not satisfied that a pension scheme has been established, or is not being maintained, wholly or mainly for the purpose of making authorised pension and lump sum payments, then HMRC may refuse to register a pension scheme, or later it may de-register the scheme.
Also, it may refuse to register a scheme, or later it may de-register the scheme, if it is not satisfied that the scheme administrator is a fit and proper person to carry out that role. HMRC is being given new information-gathering powers to enable it to make enquiries so as to help satisfy itself as to whether the scheme administrator is a fit and proper person. New penalties are being introduced of up to £3,000 for the provision of false information.
Changes are also being made to the law to help Regulator-appointed trustees.
Currently, if a scheme administrator is in "serious default" and so not paying certain tax charges that may be due – with "scheme sanction charges" as a result of unauthorised payments made by the scheme being of particular concern – liability for meeting those charges transfers to others, through the operation of a statutory priority order. Top of the order to receive the liability is the trustees, which means that professional trustees appointed by the Pensions Regulator to investigate matters and resolve issues with suspected pensions liberation schemes can find themselves having to pick up tax charges personally, in respect of the "wrongdoing" of those whom they have been appointed to investigate.
The law is being changed so as to exclude Regulator-appointed trustees from the priority order. This is clearly a sensible change. However, the catch is that it applies only to Regulator-appointed trustees who are first appointed to a scheme after 30 August 2014, which is obviously of no help to those trustees who have already been appointed by the Pensions Regulator to deal with suspected liberation schemes.