HM Revenue and Customs is asking for far more information and documents when authorising new small self-administered schemes (SSASs) to prevent “inappropriate SSASs being established”, Dentons Pensions Management has highlighted.

Commenting, Dentons director of technical services Martin Tilley said pension scams have been on the increase in recent years, especially since the introduction of the pension freedoms, and people have lost their life savings.

“The government is so concerned about this that they issued a consultation on 5 December looking at a potential ban on cold calling. This can only be a good thing for the industry, advisers and for the end consumer.”

“HMRC is now issuing a ‘notice to provide information and produce documents about an application to register a pension scheme’ and indicates a change in stance by HMRC. The request is in line with the ‘check and register’ process introduced in 2014,” he explained.

Furthermore, Tilley said the additional information now required by HMRC will have an impact on the time it takes to register a SSAS scheme and it will be important for advisers and administrators to explain this to clients to contain any frustration.

“In addition, the bank account cannot be created until the scheme is registered, meaning the scheme cannot accept contributions or transfers. So, for clients approaching their company year-end that may be looking to make corporate contributions into the new scheme, may have to take this into account.”

In the Financial Conduct Authority’s consultation on scams, it was highlighted that research by the Money Advice Service suggests there could be as many as eight scam calls every second – the equivalent of 250 million calls per year.

Individuals reported nearly £19m in suspected pension liberation fraud between April 2015 and March 2016 – twice as much as for the same period in 2014-15.

Tilley concluded: “The statistics on the potential numbers of scams is eye watering and anything that can be done to stop this trend in its tracks can only be welcomed. HMRC and the FCA are working to improve the situation for consumers and this will have a positive impact on the industry.”

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