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My PFS - Technical news - 29/08/17

Personal Finance Society news update from 16th to 29th August 2017.

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Taxation and Trusts

Investment planning

Retirement planning


The GAAR is activated - at last

(AF1, RO3)


The introduction of the general anti-abuse rule (GAAR) four years ago generated a bit of excitement at the time (July 2013)… well, in "tax planning circles", whatever they are!

Since then the GAAR has, unsurprisingly, received very little publicity.  And why would it?  It hasn't been used.  Its existence is periodically acknowledged but the GAAR has very much occupied an "it's there if needed" position.  The authorities seem to have relied on targeted anti-avoidance rules (TAARs), litigation and publicity to execute their plan to stamp out aggressive tax avoidance that defeats the intent of Parliament.


It has been reported that the GAAR was used to combat and render ineffective an income tax avoidance scheme founded, in effect, on the payment of directors through gold bullion.  The case was referred to the GAAR Advisory Panel.  The Panel said it was a clear case of an attempt to "frustrate the intent of Parliament" by using intricate and precise steps to exploit tax loopholes.  This finding by the Panel will allow HMRC to use the GAAR to impose a "just and reasonable "tax liability……in effect, one that would have accorded with the intent of Parliament for such transactions.

Without going into detail it seems that the schemes were predicated on the payment in the form of gold bullion associated with a theoretical obligation to pay the value of the asset to a trust at some point in the future.  The schemes and this obligation made the payment in bullion non-taxable.   The recipient directors/employees then released cash in the form of a loan secured on the gold.

In a statement following the Panel's decision, HMRC said it had "wide-reaching impacts and reinforces the power of the GAAR in tackling abusive tax avoidance."  It said: "We're delighted with the opinion of the GAAR Advisory Panel.  HMRC has already made clear that gold bullion avoidance schemes don't work and that we will challenge these schemes."

Reminder of the fundamentals

  1. The GAAR was introduced in the Finance Act 2013 and took effect from 17 July 2013.  It is intended to counteract "tax advantages arising from tax arrangements that are abusive".
  2. "Tax arrangements" exist where obtaining a tax advantage is "one of the main purposes" of the transactions.
  3. The GAAR can apply across a number of taxes including (but not limited to) income tax, CGT, corporation tax, IHT, NIC, stamp duty and the Diverted Profits Tax.
  4. Some amendments to the GAAR were introduced by the 2016 Finance Act but the fundamentals remain.
  5. To complement the legislation, HMRC published guidance in April 2013 which expressly states that the GAAR represents a very distinct move to a legislatively supported "purposive" approach rather than one that is founded on the "letter of the law".

The guidance sets out the Parliamentary intention that the statutory limit on reducing tax liabilities is reached when arrangements are put in place which go "beyond anything which could reasonably be regarded as a reasonable course of action."  This is known as the "double reasonableness" test (see 8 below).

  1. Just what is a "tax arrangement?" is clearly important in determining how the GAAR can be applied.  A "tax arrangement" is any arrangement which, when viewed objectively, has the effect of obtaining a tax advantage as its main purpose or one of its main purposes.  Clearly this sets a low threshold for considering the possible application of the GAAR.  However, for any arrangement to be caught by the GAAR it must also be "abusive".
  2. So what is "abusive?"  Abusive tax arrangements are arrangements the entering into or carrying out of which cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions, having regard to all the circumstances.
  3. The so-called, "double reasonableness" test is widely seen as the main safeguard for the taxpayer.  This requires HMRC to be able to show that the arrangements entered into "cannot reasonably be regarded as a reasonable course of action".  Tax arrangements will be treated as abusive if, having regard to all the circumstances, entering into the arrangements cannot reasonably be treated as a reasonable course of action in relation to the relevant tax provisions.
  4. Where tax arrangements are found to be abusive, the tax advantages are counteracted by the making of adjustments which "are just and reasonable".
  5. Helpfully, Part D of the guidance contains numerous examples of when an arrangement might, or might not, applying the double reasonableness test, be treated as abusive in the context of the GAAR.

In a bit more detail - in relation to Panel Opinions and the Penalty

Panel Opinions

A sub-Panel comprised of three members (with appropriate expertise) is chosen from the full GAAR advisory panel to consider each matter referred to the Panel by a designated HMRC officer.  The sub-Panel will consider each matter on the basis of written summaries of HMRC's views and the taxpayer's views (if any) provided during the GAAR process.  There are no hearings.  The Panel can provide one or more reasoned opinions, depending on whether the members of the sub-Panel come to an unanimous view or not.  The sub-Panel is also entitled to come to the view that they do not have sufficient information to reach a view on the reasonableness of the tax arrangements.  This may well be the outcome if there are cases where none of the sub-Panel members feel that they have sufficient expertise to form an opinion on the relevant tax arrangements.

The test the sub-Panel must consider (and on which they deliver their opinion(s)) is whether (in each Panel member's opinion) the entering into and carrying out of the tax arrangements is or is not a reasonable course of action in relation to the relevant tax provisions and having regard to all the circumstances (these are the same circumstances as apply to a determination on the application of the GAAR).  This is known as the "single reasonableness test".  Under this test there is no requirement for the sub-Panel members' view(s) to be reasonable.  It is merely their view (even if unreasonable) of the reasonableness of the tax arrangements in question.  They are not considering whether or not the GAAR applies since that would require the double reasonableness test to be applied.

GAAR penalty

With regard to tax arrangements entered into on or after 15 September 2016 (the date of Royal Assent to the Finance Act 2016), taxpayers who enter into arrangements that are counteracted by the GAAR (and who have given to HMRC a tax return, claim or other document on the basis that the tax advantage arises) are liable to a penalty of 60% of the value of the counteracted tax.

The taxpayer will not be liable to a GAAR penalty if the taxpayer takes action to fully counteract the abusive tax advantage (by, for instance, amending a tax return or claim or by withdrawing an appeal and entering into an agreement with HMRC and, in any case, notifying HMRC of the corrective action taken) broadly before the matter is referred to the GAAR Panel or, in the case of a notice of binding, within 30 days of the date of the notice of binding.

The legislation achieves this by:

Providing that if a taxpayer takes corrective action before the beginning of a period known as the "closed period" then:

  • In the situation where a notice of proposed counteraction has been given,  the matter will not be referred to the GAAR Panel, which, in turn, means that HMRC will not be able to issue a final counteraction notice under FA 2013 Sch 43, para 12.
  • In the situation of a pooling notice of binding, the notice is treated as not having been given in the first place, which means that HMRC will not be able to issue a final counteraction notice under FA 2013, Sch 43, paras 8, 9 or FA 2013, Sch 43, para 8(b).
  • Prohibiting the taxpayer from taking any corrective action during the closed period.
  • Ensuring that a taxpayer cannot be liable to a GAAR penalty unless a final decision notice stating that a tax advantage is to be counteracted has been given and the tax advantage has been counteracted by the making of adjustments under FA 2013, Sch 43.

While this news is interesting of itself it should also serve as a reminder that it pays to shun aggressive tax avoidance schemes and rely on tried and tested tax planning strategies.  In this context advisers have an important role to play in reassuring their clients that just because a strategy is tax efficient doesn't make it likely to be attacked.

Update on ISA tax advantages to be extended to deceased estates


On 13 February 2017 HMRC published draft regulations to allow ISAs to retain their tax - privileged status during the administration of a deceased ISA saver's estate.

The relevant Statutory Instrument (SI) to give effect to the change was "put on hold" until after the General Election. 

We have now received verbal confirmation from a spokesperson at HMRC that the Government intends that the SI - The Individual Savings Account (Amendment) Regulations 2017 - will be laid shortly after Parliament reassembles on 5 September subject to unforeseen changes in circumstances.

The SI will have effect in relation to deaths occurring on or after 6 April 2018.  


National savings & investments launches a junior ISA

(AF4, FA5, FA7, LP2, RO2)

National Savings & Investments (NS&I) have long offered cash ISAs. At times, their Direct ISA has been at or near the top of the league tables, mainly because NS&I tend to be slower than their commercial competitors in cutting interest rates. At present the Direct ISA is behind the pack, offering 0.75% interest when 1% is available from several big names.

On 15 August NS&I launched their new Junior ISA, filling the gap below age 16 at which the Direct ISA becomes available. The main features of the NS&I JISA are:

  • An interest rate of 2% (variable);
  • Minimum investment £1;
  • Unlike the Direct ISA, the JISA accepts transfers in (from existing JISAs and Child Trust Fund Accounts);
  • No penalty on transfer out; and
  • Only available online.

While the interest rate is much more attractive than the Direct ISA, in the JISA market it is far from outstanding: several High Street names offer a 3.00% variable rate.

The launch of the JISA was accompanied by the announcement that Children's Bonds will be closed to new sales from September 2017. The current issue (36) is paying 2.00% (tax-fee), fixed for 5 years, with a maximum investment limit of £3,000 (per issue). Existing issues will be allowed to run through to maturity, but it would appear from NS&I's press release that there will be no rollover opportunity to a fresh Children's Bond.

The latest HMRC statistics show that, in April 2016, £1,757m was invested in cash JISAs, 64% of the total JISA investment of £2,756m. Account numbers in 2015/16 had a similar split, with 67% going to cash. However, in terms of amounts contributed, cash represented 57%. It is arguable that many younger JISA holders have an investment timescale which would make stocks and shares JISAs a more appropriate selection.

The year end comes early?

(AF4, FA7, LP2, RO2)

Last December we commented on a potential tax year end shortage of venture capital trusts (VCTs). Many of the big names had revealed that they would either be seeking no new funds or limiting issues to non-prospectus levels (a €5m maximum). In the event 2016/17 saw £542m of VCT fund raising according to the AIC, the second highest level on record.  This included a record £120m (22% of the total) for a single VCT.

One of the reasons for the reluctance to raise new money last year was that VCTs were getting to grips with the new investment rules legislated for in the Finance (No. 2) Act 2015. This had slowed down the rate of deals and left some trusts with more than enough cash looking for a home.

The trusts now seem to have adapted to the new investment regime, with many now having announced new share issues. Quite why there is such an early crop is unclear - it may be that trusts are trying to avoid a frenetic March scramble or it might reflect the introduction of an Autumn Budget. Whatever the reason, the list of fund raisers includes:


Maximum Offer*


Launch date

Albion VCTs



Baronsmead Venture & Second Venture



Maven Income & Growth VCT 3 & 4



Mobeus VCTs


Early September

Northern VCTs



Octopus Titan


Late Summer

*   + indicates over-allotment facility

In addition, top-up offers from Unicorn AIM (seeking up to £50m), Foresight 4 (seeking up to £100m) and Octopus AIM VCTs (seeking up to £40m) are now open.

It looks like early Autumn will be a busy time for VCT business. Advisers wanting to offer the pick of the crop - as opposed to what is left over in late March - should consider warning their clients now to be ready to act. Experience suggests that the best issues can disappear almost as soon as they are formally launched.

Government borrowing figures improve

(AF4, FA7, LP2, RO2)

The July borrowing figures showed a surplus for the month, the first for July since 2002.  It is a little piece of good news for the Chancellor ahead of his first Autumn Budget.

At the time of the (unwittingly pre-election) March Budget, the Office for Budget Responsibility (OBR) forecast that public sector net borrowing (PSNB) for 2017/18 would be £58.3bn, 13% up from its then estimate of £51.7bn for 2016/17. In that seemingly distant era, this increase was not a major concern to the Treasury, as the OBR was projecting the PSNB to drop to around £20bn by the time the next election was due in May 2020. A lot has happened since March…

First off, there is some good news from the last fiscal year. The latest estimate for 2016/17 PSNB is £45.1bn, a £27bn decline from 2015/16 and £6.6bn below the OBR's March estimate. The 2016/17 deficit estimate has been coming down each month since March because of recalculations of receipts (generally up) and expenditure (generally down). The latest estimate, cutting another £1.1bn from the previous month's figure, "largely reflects an upward revision to income tax receipts" according to the OBR commentary on the ONS data.

The flip side of the falling 2016/17 deficit number is that it widens the gap between last year's outturn and this year's projected figure. For now, the OBR is sticking to its £58.3bn figure for 2017/18, which now implies a 29% increase over the previous year. The OBR comments that the 2016/17 deficit revisions are "already quite striking", but says "This reflects a number of factors, so it is not clear how far they would have led us to publish a lower forecast for this and subsequent years in March had we known of them at the time and to what extent they will affect our next forecast [alongside the Autumn Budget]."

The borrowing figures for the month of July alone revealed asurplusof £0.2bn against a deficit of £0.3bn last year and market expectations of a £1bn shortfall. July is automatically a good month for the numbers because of self-assessment receipts, in this instance the second payment on account for 2016/17. Even so, surpluses are unusual - the last in July was 15 years ago. Those payments on account were based on 2015/16 liabilities, so reflect a year when dividends were brought forward ahead of the 2016/17 tax increase. There may even be more self-assessment revenue to come, given that 31 July was a Sunday, so some payments may fall to be recorded in August. The OBR expects that come January 2018, when balancing payments for 2016/17 fall due, at least some of the extra revenue now being seen will disappear - its forecast for current year self-assessment receipts is a fall of £3.8bn over last year.

For the first four months of 2017/18 PSNB amounted to £22.8bn, up £1.9bn on 2016/17. If the borrowing pattern follows the 2016/17 experience, that suggests an outturn for 2017/18 of about £49bn. However, the anticipated fall in self-assessment receipts mentioned above means that last year's pattern will not be repeated. However, at this stage there does still seem to be some leeway.

This borrowing performance, if it can be maintained, gives the Chancellor some wriggle room heading towards his Autumn Budget. He needs it as he lost one source of revenue contained in the OBR March Budget projections when he was forced to climb down on Class 4 NIC increases.


Response to pension scams consultation published

(AF3, FA2, JO5, RO4, RO8)

The pension scams consultation response related to the consultation which was launched in December 2016 and was looking at three potential interventions aimed at tackling different aspects of pension scams:

  • a ban on cold calling in relation to pensions, to help stop fraudsters contacting individuals;
  • limiting the statutory right to transfer to some occupational pension schemes; and
  • making it harder for fraudsters to open pension schemes.

The consultation received 111 responses and the majority supported changes and the multi-pronged attack on pension scams and some even suggested the Government should go further.

Minor changes have been made to the definition of pension scam which Project Bloom will use going forward. The updated definition is as follows

The marketing of products and arrangements and successful or unsuccessful attempts by a party (the "scammer") to:

  • release funds from an HMRC-registered pension scheme, often resulting in a tax charge that is not anticipated by the member;
  • persuade individuals over the normal minimum pension age to flexibly access their pension savings in order to invest in inappropriate investments;
  • persuade individuals to transfer their pension savings in order to invest in inappropriate investments;

where the scammer has misled the individual about the nature of, or risks attached to, the purported investment(s), or their appropriateness for that individual investor."

Banning cold calling

The government intends to work on the final and complex details of the ban on cold calling in relation to pensions during the course of this year, then bring forward legislation to deliver the ban when Parliamentary time allows.  The ban will cover various types of calls including:

  • offers of a 'free pension review', or other free financial advice or guidance
  • assessments of the performance of the individual's current pension funds
  • inducements to hold certain investments within a pensions tax wrapper including overseas investments
  • promotions of retirement income products such as drawdown and annuity products
  • inducements to release pension funds early
  • inducements to release funds from a pension and transfer them into a bank account
  • inducements to transfer a pension fund
  • introductions to a firm dealing in pensions investments
  • offers to assess charges on the pension

In addition the ban will be extended to cover electronic communications such as emails and text messages because they could otherwise be used to circumvent the cold calling ban.

However legitimate contact will be excluded from these rules including:

  • calls from advisers following referrals, such as a solicitor referring a customer to a financial adviser
  • calls from a third party administrator of an individual's pension fund
  • calls from a provider to the beneficiary of a deceased member's fund
  • calls attempting to locate 'gone-aways'

Limiting the right to statutory transfer

The government intends to work closely with industry, consumer groups and other stakeholders during the course of this year to help finalise the details of this proposal, in particular to determine the most effective way to implement the employment link. They will legislate to ensure that any changes follow the roll-out of the Master Trust authorisation regime.

In the consultation, the government proposed limiting the statutory right to transfer:

  • transfers in to personal pension schemes operated by firms authorised by the Financial Conduct Authority (FCA)
  • transfers in to authorised Master Trust schemes
  • transfers where a genuine employment link to the receiving occupational pension scheme could be evidenced.

After looking at the alternatives and taking account of concerns the intention is to implement these restrictions in full.

Making it harder to open fraudulent schemes

The government intends to introduce legislation in a Finance Bill later in 2017 aimed at ensuring that only active companies can register a pension scheme and will introduce additional changes to the scheme registration process. In addition, they will engage with industry, consumer groups and other stakeholders to consider feedback on options to professionalise small self-administered schemes.

One of the proposals suggested that only active companies could register a pension scheme, the consultation established that this could cause issues because there are times that a dormant company any want to establish a new scheme, in addition it could have caused issues for sole traders and partnerships. The government therefore proposes to require all new pension scheme registrations to be made through an active company, except in legitimate circumstances, where HMRC will be given discretion to register schemes with a dormant sponsoring employer.

This requirement will extend to existing pension schemes if they are registered with a dormant sponsoring employer, with the same discretion so that HMRC can decide not to de-register a scheme in legitimate circumstances. This change will be legislated for in a Finance Bill in 2017. The existing right of appeal if HMRC rejects a scheme registration will apply to this new requirement.

It is planned to ensure that sponsoring employers of occupational pension schemes are away that they are associated with a scheme and that HMRC can de register a scheme if the appropriate consent it no given.

Small Self-Administered Schemes (SSAS) were also discussed in the consultation and some respondents wanted the reintroduction of pensioneer trustees to help protect what some believe to be vulnerable types of schemes.  However, others felt that the cost would be prohibitive. 

The government agrees that pension scheme members with relevant knowledge should be free to choose their own investments. The government will not therefore pursue the option to require pensioneer trustees at this stage


The proposed changes, especially to the cold calling should make a significant difference to those being targeted by scams, although not fully as it isn't possible to stop calls from overseas. The biggest part will be education of the public to ensure that they are aware that they shouldn't be receiving this type of call and should therefore not engage with the fraudsters in the first place.

Time will tell if these changes will work fully but it is all a step in the right direction.

ROPS, QROPS, QNUPS and other acronyms

(AF3, FA2, JO5, RO4, RO8)

Overseas schemes…what does it all mean?

Now may be a good time to look at where we are now and what all these various acronyms now mean.

Firstly, the change in HMRC's published list which caused some consternation was that it referred to ROPS as opposed to QROPS. This led to many people stating that QROPS were no more and they had been replaced with ROPS and some articles even referred to "ROPS, formerly known as QROPS". This is in fact incorrect, in that ROPS and QROPS are two different things, so it may be worthwhile going back to basics.

To start at the beginning, a Pension Scheme (PS) is defined by HMRC as scheme or arrangement designed to provide benefits at retirement, or death before retirement or ill health. This refers in the main to UK pension schemes and as you would expect there are some regulations governing the treatment of non UK, or Overseas Pension Schemes (OPS).

An OPS is how HMRC define an Overseas Pension Scheme. To meet this definition the scheme must meet two requirements, the regulatory requirements test and the tax recognition test. If a scheme is a ROPS there may be some tax benefits in terms of relief available to the employer or member. Further information on ROPS can be found here

The next step is to be a ROPS, or a Recognised Overseas Pension Scheme and to meet these requirements a scheme must first be an OPS, meet the Pensions Age test (broadly speaking the requirement to have a retirement age the same as UK schemes) and be in a jurisdiction that is either a) in the EEA or b) has a Double Tax Treaty (DTT) or a Tax Information Exchange Agreement (TIEA) with the UK.

However, just because a scheme is a ROPS doesn't mean that a UK scheme can transfer to it without penalty. For a scheme to be allowed to receive transfers from a UK scheme without penalty it must be a Qualifying ROPS (QROPS). To be a QROPS the scheme trustees must firstly advise HMRC that it is a ROPS, and also confirm that they will report payments made during the required reporting timescales. In addition the trustees must sign an undertaking to inform HMRC if the scheme ceases to be a recognised overseas pension scheme and to comply with any prescribed information requirements imposed on the scheme manager by HMRC. This is the main difference between a ROPS and a QROPS.

HMRC used to publish a list of schemes that were QROPS, which then became a list of schemes which have advised HMRC that they are QROPS, and is now a list of schemes that have advised HMRC that they are ROPS.

There has been much speculation as to why the HMRC list refers to ROPS and not QROPS, and it could be that they do not want to create an issue should a scheme in future be found to have been a ROPS but not a QROPS - for example by failing to report as they should. Being a ROPS is generally a question of fact, a scheme in itself either is or isn't a ROPS. To be a QROPS requires the Trustees of a scheme to report in the future, and this is not something that can be stated as a fact. HMRC have been caught out before in putting schemes on its list and having people rely on the list as "proof" the scheme was a QROPS.

Consequently, when people use the phrase "ROPS, formerly QROPS" they are perhaps misunderstanding the concept as HMRC differentiate between the two so perhaps the International Pensions community should as well.

The Qualifying Non UK Pensions Schemes (QNUPS) regulations were introduced in 2010 to correct an anomaly in the IHT Act to allow payments and transfers, to certain overseas schemes to be free of Inheritance Tax. It is interesting that the requirements to be a QNUPS are under the IHT Act whereas the OPS / ROPS / QROPS requirements are under the Pensions Act.

To qualify as a QNUPS the overseas scheme had to meet certain requirements and these mainly mirrored most of the QROPS regulations. Hence a scheme that was a QROPS, was also a QNUPS although the reverse wasn't necessarily true.

The definition of a QNUPS was set out in Statutory Instrument no. 51 of 2006 and no changes have been made since it was issued.

Unlike a QROPS, there is no notification to HMRC for a QNUPS so it is important to ensure that any scheme used as a QNUPS meets all the legislation requirements before any payments are made. In brief, the scheme must be open to residents of the country it is established in, provide some form of tax relief, be registered with the local tax authorities and be regulated as a pension scheme by a body that exists to regulate pension schemes. If there is not a pension regulator then the scheme can still be a QNUPS provided that at least 70% of the fund provides an "Income for Life". This last piece is important as it suggests that schemes which are in a jurisdiction where there is no specific body that regulates pension schemes are unable to provide a QNUPS that operates flexi access.

The main concern around QNUPS, and where they are most likely to be attacked by HMRC, is if it can be shown that the contribution was not made for "bona fide" retirement planning. For example, someone who is already retired and makes a large contribution to a non UK pension scheme and fails to take any income from it is unlikely to have made the contribution as genuine retirement planning. At the other end of the scale, a UK resident who is still in employment and is unable due to lifetime allowance or annual contribution limits to contribute to a UK pension should be fine. Also, an expat who is unable or unwilling to contribute to a local scheme should also be seen as having made the contribution for bona fide retirement planning.

In an ideal scenario a client would discuss his pension shortfall with his adviser, and the adviser would obtain a calculation (ideally from an actuary or similar) of how to meet that shortfall based on his risk profile and future expectations. Following this the client could invest the recommended amount into a QNUPS with the plan being to start taking income at retirement. As long as this is documented fully, and the Non UK scheme meets the QNUPS regulations, then any payments should be outside the client's estate for IHT purposes.

While much has been talked about of the advantages of a QNUPS, it is worthwhile looking at the potential consequences of a contribution being made and HMRC deciding that the scheme, and the contribution made, did not meet the QNUPS requirements to be exempt from IHT. The following example highlights the potential issues:

Helen is 63 and contributes £1 million to a scheme she believes is a QNUPS. She takes no income form the scheme and dies 15 years later. On her death HMRC question the contribution and state that they believe the scheme was not a QNUPS and the contribution was not for pension planning. If the scheme is not a QNUPS, the only other thing HMRC can classify it as is a Discretionary Trust. If HMRC are successful, then they could demand tax that should have been paid. Firstly a tax of 20% on the contribution above the Nil Rate Band would have been due, as would a tax at the ten year anniversary. In addition as Helen was a beneficiary of the "Trust" the contribution would be treated as a Gift with reservation meaning there is no IHT benefit so the full IHT would be due on passing on to her beneficiary (with an offset for tax paid by the trustees).

Consequently it is imperative that if a QNUPS is being considered it is well documented that the investment was made for the purpose of retirement planning - a target benefit calculation should enable this to be shown. Secondly, the pension scheme should be set up to ensure that it meets the requirements of a QNUPS in terms of its deed and rules. As an added protection factor, it would seem sensible to use a provider that is only regulated to do pension business and not general trust business and that the pension rules meet the QNUPSrequirements meaning it would not be possible for the provider to set up anything other than a pension scheme. Examples of jurisdictions where pensions are separate regulated activity are Isle of Man, Malta and Gibraltar.

The constant changes around pensions, and in particular International pensions, certainly require good professional advice as the consequence of doing things in the wrong way is a major unexpected tax bill.  

This bulletin represents the views of John Batty of Boal & Co.  It is provided strictly for general consideration only and no action must be taken or refrained from based on this bulletin.  Consequently neither Technical Connection Limited nor Boal & Co can accept any responsibility for any loss occasioned as a result of any action taken or refrained from being taken.  Specialist advice must always be sought.

TPR publishes fifth automatic enrolment annual commentary and analysis report

(AF3, FA2, JO5, RO4, RO8)

The Pensions Regulator (TPR) publishes their fifth report which highlights the success of automatic enrolment (AE) to date.

In the report Darren Ryder, Director of Automatic Enrolment comments on the success of the role out of AE through the staging approach and the challenges still to come.

Today's report shows that by the end of March this year, around seven million staff had been automatically enrolled by around 500,000 employers. In February 2018 all those with a pre allocated staging date will have passed that date. From October 2017, anyone setting up a business and taking on staff will need to work AE into their plans.

The report contains upper and lower estimates of the numbers of new employers expected to have pension duties until the start of 2020. It shows how TPR predicts that around 73% of all small businesses, and nearly half of micro businesses, will have eligible staff.

The estimates demonstrate how automatic enrolment will continue to reverse the decline in workplace saving. In 2012, 55% of staff were saving into a workplace pension and by 2016 that figure had increased to 78%.

Interesting facts from the report

In 2016-17 TPR issued:

  • 12,181 fixed penalty notices
  • 187 statutory demands for information
  • 33,716 compliance notices
  • 1,193 unpaid contributions notices
  • 4 warrants
  • 2,527 escalating penalty notices
  • 260 statutory inspection notices

Total workers automatically enrolled:

  • By 2013 - 1 million
  • By 2014 3 million
  • By 2015 5.2 million
  • By 2016 6.1 million
  • By 2017 7.7 million

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