Master Trust pension schemes to be targeted by taxman under new powers

The government is giving HMRC new powers to refuse to register and to de-register master trust pension schemes and schemes for dormant companies which are not authorised by The Pensions Regulator in a bid to curb pension scams

The measure will affect pension scheme administrators and trustees of existing registered pension schemes and is part of wider efforts by government to clamp down on pension scams. The draft legislation on pension tax registration and pensions tax relief is in Finance Bill (No.2), which is likely to be passed early this autumn.

The powers will come into force from 6 April 2018.

Legislation will be introduced in Finance Bill (No.2) 2017 amending Finance Act 2004 to widen the circumstances in which HMRC may refuse to register a pension scheme to include where the scheme is a master trust pension scheme and has not been authorised by The Pensions Regulator.

It will also allow HMRC to prevent pension schemes from registering for tax purposes if a sponsoring employer is a dormant company.

The extended HMRC powers are designed to support The Pensions Regulator through compliance with its new authorisation and supervision regime.

This clause and Schedule amends Part 4 of Finance Act 2004 (FA 2004), as it relates to the registration of pension schemes for UK tax reliefs.

HMRC will incur additional costs in implementing this change, particularly with updating existing IT systems.

The HMRC Policy paper, Pensions Tax registration

The draft legislation is available here

By Sara White

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