Guest comment: Collateral damage

Last month, we welcomed HMRC’s initiative to improve standards in the ‘tax advice’ market but made it clear in our response to their consultation that this must not be at the expense of inadvertently damaging the pension advice market or the provision of high quality information to scheme members.

HMRC is looking to find an extremely wide definition of ‘tax advice’. This is understandable
as it means promoters of tax avoidance schemes cannot hide behind a label of offering ‘guidance’ rather than ‘tax advice’.

However, given the complexity of pensions tax rules, such a definition could inadvertently capture a wide element of the industry helping the day-to-day delivery of pension schemes.

This could significantly inconvenience scheme members and bring pensions professionals into regulations primarily designed with traditional tax advisers and their clients in mind.

We are also concerned it could become difficult to communicate with trustees, employers or members effectively without encroaching on a wide view of tax advice.

Any policy regulating tax advice should not interrupt the high quality advice given by pension professionals, interfere with the good running of pension schemes, or interfere with The Pensions Regulator’s aim that pension schemes give members as full as possible information to understand their rights and options.

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