HMRC gets tough on scheme Administrators
HMRC issued a key facts document about the responsibilities of the pension scheme Administrator on 23 March 2007.
The document warns that a pension scheme with no scheme Administrator may be de-registered, losing its tax privileges and be liable to a substantial tax penalty.
The document goes on to warn that the scheme Administrator must keep scheme documents for at least six years, and will be liable to penalties if they fail to provide information required by a notice or the legislation, provide incorrect information, do anything forbidden by the legislation or fail to keep records.
Finally, HMRC warns that the scheme Administrator may be liable for the tax charge if the pension scheme makes an unauthorised payment.
The role of the scheme Administrator is onerous and fraught with dangers for the inexperienced. Rowanmoor Pensions has always been aware of this. It seems HMRC is concerned that many have taken on the scheme Administrator role unknowingly and totally unaware of the legal liabilities they undertake.
Rowanmoor Pensions own research, undertaken at our SSAS roadshows in the Autumn, supports this view. A survey of advisers revealed that a significant number (30%) have client's who act as scheme Administrator for their SSAS and the vast majority (81%) of these clients do not understand the implications of this.
Every scheme must have a professional scheme Administrator to protect the members, their pension funds and the other advisers.
Rowanmoor Pensions is alarmed at the number of providers who have resigned as scheme Administrator leaving the members to fend for themselves. It is a recipe for disaster for both the members and their advisers.
At Rowanmoor Pensions, we insist on being the scheme Administrator to protect the members, the Trustees and the IFAs who advise the schemes.