Registration: registering a pension scheme: what HMRC does after the application has been made
Outline of HMRC’s role in the registration process
Section 153(4) to (6) and section 156A Finance Act 2004
After the scheme administrator has made the application to register the scheme, HMRC will consider that application and decide whether or not to register the pension scheme.
HMRC may need to ask further questions before making a decision as to whether or not to register the scheme - see HMRC enquiries into a registration application below.
There is no time limit on how long HMRC can take to decide whether or not to register the scheme. However if HMRC has not made a decision within six months of receiving the application the scheme administrator can appeal to the tribunal as if HMRC had told them that they had decided not to register the scheme. No appeal under section 156A Finance Act 2004 can be made within six months of HMRC receiving the application to register the scheme.
HMRC must decide to register the pension scheme unless it appears to HMRC that any of the following applies:
- any information contained within the application or otherwise provided by the scheme administrator to HMRC in connection with the application is materially inaccurate
- any document produced to HMRC by the scheme administrator in connection with the application to register the scheme contains a material inaccuracy
- any declaration accompanying the application to register the scheme is false
- the scheme administrator has failed to comply with an information notice issued under section 153A Finance Act 2004 - see HMRC enquiries into a registration application below
- the scheme administrator has deliberately obstructed an HMRC officer in the course of an inspection made under section 153B Finance Act 2004 and that inspection had been approved by the tribunal - see HMRC enquiries into a registration application below
- the pension scheme has not been set up, or is not being maintained, wholly or mainly for the purpose of providing authorised pension or lump sum benefits (as set out at section 164(1)(a) or (b) of Finance Act 2004),
- any of the persons who are the scheme administrator is not a fit and proper person - see PTM153000 for more information
- an occupational pension scheme that has not been registered before 6 April 2018 has a sponsoring employer that is a dormant company. A company is dormant if, in the year before HMRC decides whether or not to register the scheme, it has been dormant for a continuous period of one month, or
- a Master Trust scheme that has not been registered before section 3 Pension Schemes Act 2017 (PSA 17) comes into force is unauthorised. A Master Trust scheme is unauthorised if it is not authorised under Part 1 PSA 17 (or corresponding Northern Ireland provision) and its operation would be unlawful without such authorisation. Where a registration application is received from a Master Trust scheme, HMRC will exercise its discretion and will wait for confirmation from the Pensions Regulator that the Master Trust is authorised before the scheme can be registered.
As well as giving HMRC grounds to refuse to register a scheme, providing incorrect information or false declarations to HMRC can make the scheme administrator liable to penalties - see PTM032100.
Where HMRC decides to register the scheme they will notify the scheme administrator - see PTM032300.
When a scheme is registered by HMRC it means that, based on the information currently available, HMRC believes that the scheme is suitable for registration. HMRC may carry out further checks after registration to satisfy themselves that the conditions to be a registered pension scheme were, and continue to be, met. HMRC has the power to enquire into the scheme’s affairs at a later date and may withdraw the scheme’s registration (de-register the scheme) from a later date. The grounds on which HMRC can consider de-registering a scheme include the discovery that any information or declaration given in the registration application was materially inaccurate or false - see PTM033200.
If HMRC decide not to register a scheme they will notify the scheme administrator telling them the reason for their decision - see PTM032400.
HMRC enquiries into a registration application
HMRC may need to ask for more information to help them consider the application to register the scheme. HMRC has specific powers enabling them to obtain information and inspect documents to enable them to decide whether or not to register the scheme. These powers allow HMRC to issue information or inspection notices to a scheme administrator or to another person.
Section 153A Finance Act 2004
Under section 153A HMRC can issue an information notice to:
- a scheme administrator, or
- any other person
requiring them to provide any information or document that HMRC may reasonably require for the purpose of deciding whether or not to register the scheme. Where the information notice is issued to someone other than the scheme administrator HMRC will send a copy of the notice to the scheme administrator.
The restrictions on what the information notice can cover as set out at paragraphs 18 to 20 and 23 to 27 Schedule 36 Finance Act 2008 apply. Guidance on this can be found in the Compliance Handbook at CH22000.
A scheme administrator cannot appeal against an information notice issued under section 153A Finance Act 2004. If a scheme administrator does not fully comply with an information notice HMRC may decide not to register the pension scheme. The scheme administrator will then be able to appeal against the decision not to register the pension scheme - see PTM032400.
Where a section 153A notice is issued to someone other than the scheme administrator they can appeal against the notice or any requirement in the notice - see CH24340.
Power to inspect documents - inspection visits
Section 153B Finance Act 2004
Under Section 153B Finance Act 2004 HMRC may enter business premises to inspect documents on the premises, if HMRC reasonably requires inspection of those documents for the purpose of deciding whether or not to register the scheme. HMRC may carry out an inspection visit at the business premises of the scheme administrator or any other person.
Business premises has the same meaning as that given by paragraph 10(3) Schedule 36 Finance Act 2008 - see CH25180.
During the visit HMRC cannot require inspection of a document that HMRC could not ask for under a section 153A information notice.
HMRC will usually arrange an appointment to visit premises at least 7 days in advance. In some cases HMRC may ask a tribunal to approve the inspection.
If the HMRC inspection visit has not been approved by a tribunal see CH25650.
Penalties for failing to comply with an information notice or inspection visit
Section 153C Finance Act 2004
Penalties will be due for failure to comply with a section 153A information notice if that notice was issued to someone other than the scheme administrator.
Penalties are also due if someone other than the scheme administrator deliberately obstructs an HMRC officer in the course of a visit that has been approved by the tribunal - see the Compliance Handbook CH26240.
The penalties that apply are the same as those that apply for failure to comply with an information notice or obstruction of an approved visit under Schedule 36 of Finance Act 2008 - see CH26630. You can appeal against the imposition of a penalty - see CH26900.
The ‘penalty’ for a scheme administrator failing to comply with a section 153A information notice or deliberately obstructing an HMRC officer in the course of a tribunal approved inspection visit under section 153B is the fact that HMRC can refuse to register the pension scheme.
Penalties for providing inaccurate information in response to an information notice
Section 153E Finance Act 2004
Penalties apply to anyone (including a scheme administrator) that provides materially inaccurate information or a document that contains a material inaccuracy in response to a section 153A information notice. The penalties that apply are the same as those that apply for providing inaccurate information or documents in response to an information notice issued under Schedule 36 of Finance Act 2008 - see page CH26780 of the Compliance Handbook.
In addition to these penalties, where it is the scheme administrator that has provided the inaccurate information or document HMRC will have grounds to refuse to register the pension scheme. Where HMRC finds out about the inaccuracy after they have registered the scheme they can de-register it because the scheme administrator had provided materially inaccurate information or documents.