After it came to light that many members have been challenged by the HMRC over ‘deficient’ member declarations in relation to self-invested pensions, the Association of Member-Directed Pension Schemes (AMPS) warned over Relief at Source (RaS) audits and RaS declarations.
AMPS raised concern after some members informed the association that large interests may be applied to them following HMRC RaS audits finding deficient member declarations in their application forms.
The relevant declarations relate to member undertakings confirming their eligibility to receiving tax relief on contributions made to self invested personal pension schemes and the member will inform the administrator should their circumstances change.
The reported challenges will cause greater concern if the current trend becomes a widespread issue. AMPS has started its investigations to provide clarifications to members with an aim to work with the HMRC.
Audit undertaken by HMRC on administrators has shown some RaS declarations with SIPP membership application forms have been deficient, resulting in high interest charges on administrators by HMRC that has the association worried, said Robert Graves, chairman of AMPS.
“The interest charge is based on the amount of tax relief that has been given and the time lapsed between payment and a new declaration being signed by a scheme member. This can amount to a considerable sum,” said Mr. Graves.
“AMPS is looking into this issue and the extent of the problem and are asking members to supply the committee with evidence and information relating to RaS audit outcomes,” he added.
The association has been urged to investigate if the declarations being challenged are deficient at all. Members have also expressed concern over interests being charged despite members confirming that their circumstances have not changed since the original declaration and they have remained eligible for tax-relief throughout the period.
“We have already informed HMRC that we are looking into this issue and where applicable would like to liaise with them regarding our findings,” said Mr. Graves.