There are an increasing number of small self-administered schemes approvals being rejected by HMRC, the Association of Member-Director Pension Schemes has warned.
The association said a number of its members have reported rejections on new schemes looking to be authorised and also delays in communication to them from HMRC regarding the reasons.
Amps described these delays as “unacceptable and frustrating” for both the Ssas administrator and also pension scheme members.
When the association questioned HMRC about the reasons for the rejections, it found many are due to the data for the scheme and the individuals tax records not matching.
However, it added the HMRC system does not show why it was rejected, just that it is a data mismatch, which creates “delays and frustrations” for everyone involved.
Amps chair, Andrew Phipps, said: “As an industry body, Amps works tirelessly to support its members and part of this is liaising with bodies, such as HMRC, to ensure Sipp operators and Ssas administrators are heard, and their views taken on board.
“This means that our members are very open about business challenges and everyone works together to find a solution, or lobby for change.
“We are becoming increasingly concerned that HMRC are rejecting new Ssas approvals. Having drilled down into this with members, it has become clear that this is due to the individual pension scheme members not updating their personal tax account online.
“We will be working with HMRC to see if there is a way to make this process easier and that can provide transparency on why the scheme is being rejected, rather than a statement saying that the data doesn’t match.”
Amps believes the only way to solve this in the short term is for Ssas administrators and other advisers to highlight the scheme members that they should review and update their personal tax account online on the government website.
The association warned that some people do not know about the personal tax account and so it is very easy for an address to be out of date and this will cause the whole scheme to be rejected.
In addition, Amps also recommended that HMRC should be “more open” about changes they make to their systems so that users can take some steps to prepare for any change in approach they may need to make.
Response
In response to this, a spokesperson for HMRC said: “We urge pension scheme members to ensure their details are up to date, which can be done quickly and easily online. Pension scheme administrators must also ensure this has been done before submitting an application.
“It’s right that we carry out vital checks to ensure schemes will be properly administered and that those in charge of them are fit and proper persons.”
tom.dunstan@ft.com
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