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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: liaison: specialist personal tax (SPT) - pension scheme services

Pension Scheme Services

With effect from 6 April 2006 Pension Simplification has introduced legal changes to how pension schemes obtain tax relief for pension savings.

Previously pension schemes applied for ‘approval’ at the discretion of HMRC.

From the above date savings in ‘registered’ pension schemes qualify for tax relief if particular statutory requirements are met.

Specialist Personal Tax Scheme Services (PSS) is responsible for:

  • registering pension schemes for tax purposes after 6th April 2006 or approving pension schemes prior to 6th April 2006
  • monitoring schemes to make sure continued compliance with the law
  • providing policy, technical and operational guidance on the tax rules for registered pension schemes
  • identifying situations giving rise to excessive tax relief or where tax reliefs have been abused, and collecting charges used to correct the position.

The Pensions Tax Manual (PTM) details the system by which

  • registered pensions schemes obtain tax relief, and
  • registered pension schemes are monitored.

Pension Scheme Services (PSS) may enquire into matters affecting a pension scheme’s registration, or into other aspects of its operation. Such enquiries can lead to:

  • the de-registration of the scheme
  • tax charges falling on scheme members, the scheme administrator, or
  • for an occupational scheme, the sponsoring employer.

PSS would require information relating to

  • the pension scheme itself
  • the employer who contributes to the scheme
  • employees of that employer (including directors in the case of a company), and
  • individual members of the pension scheme.

Action by Caseworker

If during the course of a compliance check on an employer you discover information suggesting that there may be some inaccuracy involving a pension scheme, you should report it (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Inaccuracy means the use of a registered pension scheme to obtain non-pension benefits, for example through:

  • the extraction of value by a, sponsoring employer or member through transactions with the scheme on non-arms length terms
  • the investment by certain schemes in tangible movable property or residential property
  • the use by members of pension scheme assets.

Information Held by Pension Schemes Services

The file held by PSS on a particular scheme may contain useful information on, among other things:

  • historical valuations of the scheme (including loans, investments, over funding for example)
  • membership of the scheme, either within numerical bands or sometimes of members details
  • members benefits
  • scheme type and date of approval or registration
  • deeds setting up the scheme
  • transactions involving the scheme
  • other details that may be held electronically.

To consult the file, or obtain details held electronically you should contact Pensions Schemes Services, Compliance in Specialist Personal Tax (SPT).