HMRC has not long celebrated its first anniversary. It is now actively trying to move towards becoming a more ‘joined-up’ body rather than two separate departments thrust together. To this end it is reviewing its combined powers, ranging from simple enquiries to fullblown investigations.
If you have any doubts about the financial stability of the final salary scheme of a current or past employer, or doubts about the financial stability of the employer itself, you can request a review of your pension scheme benefits assessing the impact of the PPF. You can then make an informed decision about the security of your pension benefits and the relative benefits of transferring it elsewhere.
Remember not to leave the review too late. Once the PPF assessment period starts, benefits paid to individuals will be subject to the PPF limits even though the scheme is yet to be accepted by the PPF. Also, you will have no rights to transfer your benefits out of the scheme once it has entered the PPF assessment period, except if you had requested a transfer in writing prior to its start. You do not currently need to review your final salary pension scheme if the scheme is provided by a public sector employer. The PPF only applies to private sector schemes, as public sector schemes are secured by the taxpayer!
It has started a series of pilot programmes around the country called ‘interventions’ and it is important to be aware of them. There are six types of interventions being tested. Some involve visiting businesses and reviewing books and records whilst others include telephone calls or other forms of contact to alert taxpayers to potential problem areas.
The intervention list was first publicised in HMRC’s March 2006 consultation document ‘Modernising Powers, Deterrents and Safeguards’.
The aims of the new interventions and the trials are best summed up by HMRC.
- "With these new approaches we aim to trial a lighter touch, providing help where needed, and freeing up resources to tackle serious and deliberate non-compliance.
- We hope that the new approaches... will prove to be more flexible and less time consuming for businesses, tax agents and HMRC staff."
HMRC has confirmed that participation in trials of the interventions is voluntary. Indeed, at present it does not have formal powers which would enable it to carry out some of the interventions. Commentators have questioned whether taxpayers would welcome such intrusions into their business and if these interventions would provide appropriate information.
Nevertheless, the trials are to go ahead and will be carried out at selected locations around the country. The target sample of taxpayers has been selected on the basis of risks identified by HMRC. These risk criteria have not been published. The trials appear to place the emphasis on businesses and their records, but they will not be confined to such clients.
Where a tax adviser or agent, like Smith & Williamson, is acting for a client, HMRC should contact that adviser or agent to inform them that a taxpayer has been selected. Past experience suggests this may not always be the case. If you receive any communication about these pilots asking if you will participate, please contact your usual Smith & Williamson adviser immediately so that we can discuss how to take the issue forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
