The Society of Pension Professionals (SPP) has urged HMRC to exempt pension professionals from any new tax standards regime.
The Government is consulting until 28 May on plans to raise standards in the tax advice market.
The plans are designed to combat tax practitioners who are incompetent, unprofessional or unscrupulous and who continue to operate, harming their clients and public finances.
HMRC has proposed three options to address the problem.
They are:
- To introduce compulsory membership of a recognised professional body
- Joint HMRC/industry enforcement or
- Regulation by a separate statutory government body.
The SPP said it shared the government’s commitment to making the tax system fairer and simpler and to monitor and enforce minimum standards for tax practitioners, but added: “There is a tangible risk of pensions professionals, who are not the intended target audience for these proposals, being inadvertently captured by the proposed new regulatory regime.”
The SPP said pension professionals were likely to deal with many tax-related matters such as lump sum allowances, tax free allowances, death benefits and so on.
It said the matters almost exclusively fall into either giving information, such as communicating entitlements and broadly explaining the implications in terms of key facts, or processing an event, rather than offering individualised advice.
The SPP said: “Given the often sizeable sums of money involved and the fact savers will frequently rely on the information provided to help inform their decisions, clear definitions as to what constitutes tax advice and precisely where the tax advice/guidance boundary falls will be essential.”
The SPP suggested an exemption is needed for pensions matters relating to tax. The SPP has also urged HMRC to discuss these proposals with The Pensions Regulator – something that has not yet happened.
Tim Box, SPP member and LCP Principal, said: “It’s clear that pensions professionals are not the intended target of these proposals but with more than 35 million pensions being administered in the UK, the potential impact of unintended consequences is considerable. That’s why SPP is recommending an exemption for relevant pensions work.”