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Unauthorised payments 'give Sipps a bad name'

  • Financial Adviser

    Unauthorised payments 'give Sipps a bad name'

    Self-invested personal pensions administrators that allow unauthorised payments could give the industry a bad name, according to Rupert Curtis, managing director of Curtis Banks.

    Mr Curtis said some providers allowed its members to withdraw 25 per cent every year and pay 55 per cent tax.

    He said: "Headline-grabbing initiatives by certain providers could result in long-term damage to the reputation of the Sipp industry.

    "More immediately, advisers and their clients need to be fully aware of the risks involved in breaching the pension rules, this could very well blow up in their faces."

    Mr Curtis said if HM Revenue & Customs felt that the payments firms were allowing were effectively a right to receive an unauthorised payment, there may be no need for it to change the rules in order to clampdown on this activity.

    He said: "HMRC may already have all the ammunition it needs to impose massive tax penalties. Our firm has already looked at unauthorised payments in some detail and decided it is just asking for trouble."

    Nathan Bridgeman, director of Sipp provider Talbot & Muir, said it has been offering the facility for some months and said that it was in the spirit of HMRC rules.

    He said: "For the avoidance of doubt unauthorised payments are not unlawful. In the event of a lump sum of more than 25 per cent being taken, there are de-registration issues and further tax charges.

    "Under no circumstances would we, as independent professional trustees and scheme administrators, allow this as it could result in a de-registration charge by HMRC. "

    http://www.ftadviser.com/FinancialAdviser/Pensions/Personal/SIPPs/News/article/20091105/f9edc9a4-c883-11de-8483-00144f2af8e8/Unauthorised-payments-give-Sipps-a-bad-name.jsp

    • Story by: Joy Dunbar
    • 5 November 2009