An increasing number of Small Self-Administered Schemes (SSAS) are being rejected by HM Revenue & Customs, causing frustration for both the pension administrators and pension savers, warns the Association of Member-Directed Pension Schemes.
According to the industry body, a number of its members have reported rejections on new schemes looking to be authorised as well as delays in communication from HMRC regarding the reasons.
A large number of rejections appear to be due to the data for the schemes and the individuals’ tax records not matching, said AMPS. However, the HMRC system doesn’t show why it was rejected, just that it is a data mismatch, creating “unacceptable and frustrating” delays for everyone, AMPS said.
It has called upon SSAS administrators and advisers to highlight to scheme members that they should review and update their personal tax account online. In addition, AMPS also recommends that HMRC 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, chair of AMPS, said: “As an industry body, AMPS works tirelessly to support its members. 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.”
