Pension providers have raised concerns about HM Revenue & Customs’ audit of members who are eligible for tax relief on contributions, after being challenged for having “deficient member declarations”.
The Association of Member-directed Pension Schemes says two committee members reported concerns about the revenue’s relief at source, or RAS, audits.
Chairman Robert Graves has begun sounding out other Amps members to determine the extent of the problem.
He says: “The Amps is concerned that audits being undertaken on administrators have found some RAS declarations within a Sipp membership application form to be deficient and interest is being charged by HMRC on the scheme administrator. 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.”
Yellowtail Financial Planning managing director Dennis Hall says: “The interest rate HMRC charges is higher than the base rate. If this problem is not picked up for quite some time, the interest could quickly add up.”
HMRC refused to comment.