HMRC has rejected calls to scrap the pension input period despite concerns members could face an unexpected tax hit if it is not aligned to firms’ tax years.
It has now emerged that HMRC, which held meetings with industry representatives on the subject last week, has refused to bow to pressure to scrap Pips.
Hargreaves Lansdown head of pensions research Tom McPhail says: “HMRC’s argument is that, first of all, it introduced Pips because the pension industry asked for them.
“Second, given company accounting periods and the scale of the transition already required by employers and the pension industry in order to prepare for next April, HMRC does not think it would be appropriate to take any further action at this stage.”
McPhail met with HMRC representatives last week to argue his case. He says: “We left the meeting with a strong sense that the decision is not open to negotiation, which is unfortunate as removing Pips would make the pension system simpler for most.”