I was pleased to read Margaret Snowden’s measured call for an amnesty for those scammed through pension liberation schemes , commonly sold in the early years of this century. The evidence appears as part of the inquiry into pension scams being conducted by Stephen Timms and the Work and Pensions Select Committee. Thanks to Jo Cumbo for alerting us, you can read it here
What Margaret Snowden and PSIG are saying
The evidence surrounds the ARK pension scam which regular readers will be familiar with. It is the scam that has ruined the lives of some 600 victims including Sue Flood. Angie Brooks has brought the scam’s impact to public prominence and called, as PSIG is calling, for an amnesty from HMRC.
Specifically PSIG is calling for amendments to the 2004 Finance Act that sets out the unauthorized member payments regime, coupled with preparation of accompanying regulations to deal with the detail of the amnesty.
The impact of the amnesty would be to carve out those who did not know what they were doing in taking loans from the ARK and other liberation schemes so that they are not pursued for punitive taxes on unauthorized payments.
The PSIG solution also calls for the loans to be repaid to the funds so that the fund’s administrators have funds to meet scheme liabilities and are not liable to HMRC sanctions. It provides some approximate costings for the implementation of the amnesty and detailed suggestions as to how the amnesty might apply.
This call for an amnesty was originally made in April 2019, some 18 months has passed and little progress seems to have been made. By submitting the document to Stephen Timms’ WSPC, PSIG are putting the document and its ideas before a committee that has power to influence the Treasury and in particular HMRC. As PSIG points out
Under its Tax Payers Charter, HMRC is expected to treat its customers as honest and assume they are telling the truth, unless HMRC have good reason to believe otherwise. Innocent victims of scams should be permitted this courtesy.
Many of the ARK victims are in this country and many are now veterans of testifying about their predicament in the courts and to industry groups such as PSIG and the Transparency Task Force.
I hope that their collective voice will be heard at the inquiry, if not in person, at least through a discussion of this excellent document.
The inexorability of HMRC’s pursuit of money is out of proportion to any misdemeanor. Having met several ARK victims, I know they are full of remorse for the financial impact of their actions and regret for themselves and their families that they were gullible. These are not helpful emotions as they had good reason to believe they were acting within the law and in their and their families interests.
The amendments to FA2004 proposed by PSIG would give discretion to HMRC to continue to pursue those knowing this was a scam and colluding with those operating the scheme to benefit from it. It is important that we differentiate between victims and scammers and the current practice by HMRC makes no distinction, all are in the same boat.
Conclusions of the PSIG evidence
Margaret Snowden concludes her paper with the following recommendations
- Victims of pension scams are typically not tax-evaders, they are ordinary people who are persuaded by sophisticated operators to transfer and take some of their pension monies early.
- HMRC should not assume that ordinary people understand complex pensions regulations, especially where HMRC themselves have failed to find a scheme wanting.
- HMRC should treat scams victims as telling the truth unless proven otherwise.
- Tax rules should be changed to give HMRC the power or discretion to remove the tax penalties for scams victims and for transferring schemes/administrators for payments made/received before 1 January 2014 by effectively treating them as authorised.
Call for action
Perhaps one or two readers might write into the inquiry supporting the proposals from PSIG and Margaret Snowden. If you would like to do so , then you strengthen her arguments. Although the call for evidence concludes on 21st September, there is a session tomorrow (7th October) that touches on pension liberation , so get tapping!
You can contact WPSC here
- Email: email@example.com
- Phone: 020 7219 8976 (General Enquiries)
- Address: Work and Pensions Committee | House of Commons | London | SW1A 0AA