A court has ruled that Sipp scheme operator Sippchoice should not pay sanction charges after HM Revenue & Customs claimed it was used as a pension liberation vehicle.
HMRC claimed Sippchoice allowed members to invest their funds in Imperium Enterprises and then enabled them to access them in the form of loans before the age of 55.
HMRC imposed a charge to income tax – called an unauthorised payments charge – on most of the members of the scheme.
However, Sippchoice argued imposing such a charge was not “just and reasonable” and its initial appeal was allowed by the First Tier Tribunal.
HMRC then appealed that decision to the Tax and Chancery Upper Tribunal. It argued Sippchoice had to “reasonably believe” the unauthorised payment was not a scheme chargeable payment.
It also argued some of the First Tier Tribunal’s findings were inconsistent with evidence.
HMRC’s appeal was dismissed by the Upper Tribunal. It found the initial tribunal had not made a legal error and upheld its decision.
Commenting on the case today, RPC legal director Robert Waterson says: “Though fact sensitive, this decision will be welcomed by pension administrators and provides helpful guidance on the boundaries of what the tribunals will consider to be reasonable conduct on the part of pension administrators when discharging their duties.”