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HMRC internal manual

Pensions Tax Manual

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Information and administration: information notices and inspection powers for registered pension schemes and employer-financed retirement benefits schemes

Glossary PTM000001
   

Information notices under Schedule 36 Finance Act 2008
Relief at source (RAS)
Information and inspection powers in respect of applications to register a pension scheme
Information and inspection powers in respect of a scheme administrator’s fit and proper status

HMRC’s powers to issue information notices in respect of pension scheme changed with effect from 1 April 2010. Guidance on information notices issued before this date can be found in an archived version of the Registered Pension Scheme Manual held on the National Archives website (external readers please see : http://webarchive.nationalarchives.gov.uk/*/http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM12301700.htm).

Information notices under Schedule 36 Finance Act 2008

HMRC’s general information and inspection powers are contained within Schedule 36 Finance Act 2008. Under these powers HMRC can require a person to provide information or to produce documents that may be reasonably be required to check the tax position of a taxpayer.

HMRC can issue a notice to:

  • a taxpayer under paragraph 1 Schedule 36 Finance Act 2008 to check their tax position
  • a third party under either paragraph 2 or 5 Schedule 36 Finance Act 2008 to check the tax position of another taxpayer.

As payments to and from registered pension schemes and employer-financed retirement benefits scheme can generate UK tax charges (or reliefs) on member, scheme administrators etc. it follows that these powers apply in relation to pension schemes.

Recipients of a notice can include a person who is or has been a scheme administrator, trustee, sponsoring employer or member (this list is not exhaustive).

Guidance on the operation of HMRC’s powers requiring information to be provided is in the Compliance Handbook starting at from CH23000. (External users please see http://www.hmrc.gov.uk/manuals/chmanual/CH23000.htm.)

Paragraphs 34B and 34C Schedule 36 Finance Act 2008

There are special provisions relating to information notices in respect of any matter relating to:

  • a registered pension scheme
  • a scheme that has been de-registered
  • a scheme for which an application for registration has been made (this covers schemes awaiting a decision to register from HMRC and schemes that HMRC has refused to register)
  • an annuity purchased with sums or assets held for the purposes of a registered pension scheme or a pre-2006 pension scheme, or
  • an employer-financed retirement benefits scheme.
  • a pre-2006 scheme is a scheme that was on, or at any time before, 6 April 2006Approved under either chapter 1 or chapter 4 Part 14 Income & Corporation Taxes Act 1988 (approved occupational and personal pension schemes),
  • an ‘old code’ scheme that become a registered pension scheme under paragraph 1(1)(c) Schedule 36 Finance Act 2004, or
  • a relevant statutory scheme (within the meaning of section 611A of Income & Corporation Taxes Act 1988) or a pension scheme treated as if it were such a scheme.

Guidance on these special provisions is at CH23840 (external users please see http://www.hmrc.gov.uk/manuals/chmanual/CH23840.htm).

Regulation 5 The Registered Pension Schemes and Overseas Pension Schemes (Electronic Communication of Returns and Information) Regulations 2006 Statutory Instrument - SI 2006/570

The notice may be given electronically if the proposed recipient has consented to the use of electronic communications for the delivery of information by HMRC.

Paragraph 34B(6), (7) & (8) Schedule 36 Finance Act 2008

The Registered Pension Schemes etc. (Information) (Prescribed Descriptions of Persons) Regulations 2010 - SI 2010/650

A copy of a third party notice sent in respect of a registered pension scheme should be sent to the scheme administrator unless:

  • the notice is issued under paragraph 5 of Schedule 36 for the purpose of identifying the scheme administrator, or
  • the recipient of the notice is or has been with the relevant period a scheme administrator, trustee or sponsoring employer.

The relevant period begins with the time the event in respect of which the information is required occurred, and ends with the end of the sixth tax year following the one in which the event occurred.

A copy of a third party notice sent in respect of an employer-financed retirement benefits scheme should be sent to the ‘responsible person’ unless:

  • the notice is being sent to the responsible person, or
  • the notice is issued under paragraph 5 of Schedule 36 for the purpose of identifying the responsible person.

See CH23840 (external users please see http://www.hmrc.gov.uk/manuals/chmanual/CH23840.htm) for guidance on who is the responsible person.

Failure to comply with a notice or the provision of inaccurate information or documents can lead to penalties. There are also penalties for concealing or destroying documents. Guidance on when penalties may be charged, and the amounts due can be found in the Compliance Handbook starting at CH26000 (external users please see http://www.hmrc.gov.uk/manuals/chmanual/CH26000.htm).

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Relief at source (RAS)

Regulation 15 The Registered Pension Schemes (Relief at Source) Regulations 2005 - SI 2005/3448

Information notices

In addition to the general powers at Schedule 36 Finance Act 2008 HMRC has specific powers under regulation 15 of the Registered Pension Schemes (Relief at Source) Regulations 2005 (SI 2005/3448). Under this power HMRC can issue a notice for information to a person who is or has been:

  • a scheme administrator of a scheme that operates relief at source, or
  • an individual who has made net contributions under relief at source.

The notice will specify or describe the information to be provided and the time limit by which the information must be provided. This time limit cannot be less than 14 days.

If this notice is not complied with HMRC can stop repayment of tax relief.

The RAS annual information return is issued under this power. Guidance on the RAS annual information return is on gov.uk at:

https://www.gov.uk/pension-administrators-ras-annual-information-returns.

Inspection of records

Regulation 16 The Registered Pension Schemes (Relief at Source) Regulations 2005 - SI 2005/3448

Scheme administrators of schemes that operate relief at source are required to make available for inspection by an HMRC officer, whenever requested to do so, any books, documents and other records in their possession or under their control that relate to:

  • any contribution paid to the scheme administrator
  • the scheme to which those contributions were paid, and
  • the individual who paid those contributions.

This includes any information and declaration provided under regulations 4 to 7 of SI 2005/3448 - see PTM044220.

If the records are maintained by computer the scheme administrator must pride the HMRC office with the facilities necessary to obtain the information from them.

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Information and inspection powers in respect of applications to register a pension scheme

Sections 153A to 153F Finance Act 2004

HMRC has specific powers enabling them to obtain information after an application to register the scheme has been made. This is to enable HMRC to decide whether or not to register the pension scheme. PTM032200 provides full details on these powers.

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Information and inspection powers in respect of a scheme administrator’s fit and proper status

Sections 153A to 153F and 159A to 159D Finance Act 2004

To be a registered pension scheme a scheme must have a scheme administrator who is a ‘fit and proper person’ - see PTM153000. HMRC has specific powers allowing them to obtain information to enable HMRC to investigate whether or not someone is a fit and proper person to be a scheme administrator. The powers that HMRC may use depends on whether or not the scheme is registered.

If the application for registration is still being considered by HMRC see PTM032200.

If the scheme is registered see the guidance at PTM153000.