The Inland Revenue is set to axe the de minimis funding limit for pension schemes, claiming that IFAs are abusing the system.
The de minimis limit allows company directors to contribute up to £6,000 to their pension without having to take the Pension Schemes Office funding check.
The check is a salary assessment which limits the amount that a person can contribute to their pension.
In a letter to the ABI, the PSO accuses IFAs of using the limit to encourage clients to make additional contributions which are not permitted.
The move would spark an admin nightmare for IFAs, who would have to oversee the funding check for all clients. It could also threaten the ability of directors of small companies to make pension provision.
Scottish Life marketing manager Alasdair Buchanan says: "This is another example of the Revenue coming on heavy. Everyone will be affected, even those not causing a problem. This will make things difficult for IFAs."