The publication of draft clauses for Finance Bill 2017 to 2018 giving HMRC new powers to register and de-register master trust pension schemes should help in the fight against pensions fraud says RSM.
The proposed measures extend HM Revenue and Customs (HMRC) powers to refuse to register, and to de-register pension schemes to those which are Master Trusts and don’t have authorisation from the Pensions Regulator under their new authorisation and supervision regime. The rules would also apply to those pension schemes with a dormant company as a sponsoring employer.
The purpose of the measure is to make the HMRC tax registration regime even more effective at preventing fraudulent pension schemes, by aligning with the Pensions Regulator’s new authorisation and supervision regime for Master Trust pension schemes and restricting the registration of pension schemes with a dormant company as a sponsoring employer.
The changes are designed to help HMRC to restrict tax registration to those pension schemes providing legitimate pension benefits.
‘This is an encouraging sign of collaboration across government to tackle the scourge of fraudulent pension schemes.
‘You could argue that this is a case of shutting the stable door after the horse has bolted, but these measures are nevertheless significant and should at least help to stop the problem getting worse.
‘At the moment it is especially important as transfer value factors - that dictate the size of someone’s transfer value - are so good and therefore there is a lot of demand in the market from members wanting to take advantage of the conditions and potentially falling foul of fraudulent arrangements.
‘Making it harder for fraudsters to set up scam schemes must therefore be a positive move.’
The measure is expected to have effect from 6 April 2018.