The Association of Member-Directed Pension Schemes (AMPS) has warned that there are an increasing number of Small Self-Administered Schemes (SSAS) approvals being rejected by His Majesty’s Revenue and Customs (HMRC).
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.
These delays are unacceptable and frustrating for both the SSAS administrator and also pension scheme members as few details are given as to why they are being rejected. When HMRC are questioned about the reasons for the rejections, many appear to be due to the data for the scheme and the individuals tax records not matching. It would appear that the HMRC system doesn’t show why it was rejected, just that it is a data mismatch, this creates delays and frustrations for everyone involved.
AMPS believes that the only way to solve this in the short term is for SSAS administrators and any other advisers involved in the setting up of the scheme, to highlight to the scheme members that they should review and update their personal tax account online on the Government website. Some people don’t know about the personal tax account held and so it is very easy for an address to be out of date and this will cause the whole scheme to be rejected.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 recommends that HMRC should be more open about changes they make to their systems so that users, who are a key stakeholder in these systems, can take some steps to prepare for any change in approach they may need to make.
Andrew Phipps, the chair of AMPS, said: “As an industry body, AMPS works tirelessly to support its members and part of this is liaising with bodies such as the DWP, FCA and 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 they can provide transparency on why the scheme is being rejected, rather than a statement saying that the data doesn’t match.”
