Read this article to explore the explore the role of the pension scheme administrator.
This document is intended for professional advisers using GPC Premier SSAS Limited products.
Finance Act 2004
The Scheme Administrator is a role defined in legislation and comes with certain responsibilities and liabilities. The Finance Act 2004 mandates that every pension scheme must have a scheme administrator who:
- Is appointed under the scheme rules.
- Resides in the UK or the European Economic Area.
- Has made a “required declaration” acknowledging their responsibilities and commitment to fulfilling them.
The primary duties of the Scheme Administrator include, but are not limited to:
- Registering the pension scheme with HM Revenue & Customs (HMRC).
- Managing tax relief on contributions under the relief at source system (N/a under SSAS)
- Reporting relevant events to HMRC.
- Submitting annual returns to HMRC.
- Registering the pension scheme with The Pensions Regulator (for cases with more than one member).
- Reporting relevant events to The Pensions Regulator.
- Submitting annual returns to The Pensions Regulator.
- Providing information to scheme members and others about benefits and transfers.
- Calculating and periodically reviewing pension benefits in line with current legislation.
- Ensuring compliance with all current pension legislation
Fit and Proper Persons Requirement
HMRC can refuse or de-register a scheme if the Scheme Administrator is not deemed fit and proper.
Who is a fit and proper person?
HMRC assumes a Scheme Administrator is fit and proper unless there is information suggesting otherwise. A Scheme Administrator is likely considered fit and proper if they are knowledgeable and capable of performing their duties, with no past behaviour indicating they should not manage the pension scheme.
Factors that may raise concerns include:
- Lack of sufficient knowledge of pension and tax legislation.
- Previous involvement in pension liberation.
- Past involvement with a de-registered pension scheme
- History of tax fraud or other fraudulent behaviour.
- Criminal convictions related to finance or dishonesty.
- Adverse civil proceedings related to finance or dishonesty.
- Participation in or connection with tax avoidance schemes.
- Employing advisers involved in pension liberation or tax avoidance.
- Removal from acting as a trustee by The Pensions Regulator or a court.
- Disqualification from acting as a company director or bankruptcy.
Fines and Penalties
HMRC can impose various fines and penalties for non-compliance. Examples include:
- Failure to provide requested information: £300 plus £60 per day.
- Providing incorrect information negligently or fraudulently: up to £3,000.
- Failure to keep records: up to £3,000.
- Failure to submit a Pension Scheme Return: £100 plus £60 per day.
- Incorrect Pension Scheme Return submission: up to £3,000.
- Failure to produce requested documents: £300 plus £60 per day.
- Incorrect document production: up to £3,000.
- Failure to submit an accounting for tax form: £100 per quarter.
- Incorrect Accounting for Tax Return: the unpaid tax due.
- Serious breaches resulting in HMRC Tribunal penalties: 40% of the fund value, withdrawal of registered status, and full taxation of the fund.
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