pensions-credit-uk

8% Of Pensions Schemes Are Now Refused, Following The New System Being Put In Place

pensions-credit-uk[typography font=”Cardo” size=”24″ size_format=”px” color=”#000000″][dropcap]T[/dropcap][/typography]he HMRC — which is the new identity for the Inland Revenue, as of April 2005 — has been reported as refusing to register around 8% of pension schemes, following the ditching of “process now, check later” approach. This has resulted in a new system being implemented, which includes a risk assessment prior to the registration of a scheme.

Towards the end of last year, the revenue had responded to calls from the industry that it needed to make changes to restrict its registration for the pension scheme. This would limit the possibility of liberation fraud, which has been a growing problem. By taking this reassessed approach, as of October 21st, it has meant that the occupational pension schemes weren’t instantly registered following the receipt of a fully completed form.

The HMRC — also known as Her Majestys Revenue and Customs — is now said to be conducting a “detailed risk assessment” that looks into the activity of the individual or company before reaching a decision about if it should opt to register a scheme or not.

Following the changes in October, there have only been 4,530 applications to register for new pensions schemes that have been received. Around 88% of these have been successfully registered, with the HMRC currently having refused approximately 8% of the applications. According to the HMRC, there hasn’t been a decision made on the remainder of the applications.

A spokesperson for the HMRC said [quote]The changes to our process are part of a government-wide initiative involving HMRC and other agencies aiming to detect, disrupt and deter promoters of pension liberation schemes and to ensure that individuals are aware of the true tax position. The vast majority of pension funds abide by their legal obligations, but we won’t hesitate to de-register a pension scheme where rules are not adhered to. We will apply and enforce all tax charges against both the promoters of pension liberation schemes and pension savers.[/quote]

Overall, the total applications received and registered for the schemes in 2012/2013 was 15,140. Compared with 2013/2014, the number received was 15,712, and between 6th April 2013 and 21st October 2013, there were 11,184 schemes received and registered.

All of the fresh applications that are made to register a pension schemes are being reviewed, to allow the HMRC to make an informed decision as to whether or not the scheme meets the conditions to be a registered pension scheme. Only after this process has been completed is the scheme allowed to be registered. This process can vary in length and will usually be considerably longer if the HMRC is in the process of conducting enquiries.