TaxPersonal TaxHMRC publishes guidance on pension consultancy costs

HMRC publishes guidance on pension consultancy costs

Taxman publishes updated guidance on how consultancy charging can be applied to group pension schemes

HMRC publishes guidance on pension consultancy costs

HM REVENUE & CUSTOMS has published updated guidance on how consultancy charging can be applied to group pension schemes.

The guidance – which covers rebated commission, adviser charging and consultancy charging – comfirms an employer can take financial advice in relation to setting up a group personal pension scheme and that the cost of this could be taken out of members’ funds, Accountancy Age’s sister publication Professional Pensions reports.

However, HMRC has stressed that for a charge to be considered an authorised member payment, it must be a “genuinely commercial” arrangement “appropriate in relation to the service the adviser provided”.

Services eligible for consultancy charging include giving advice or assistance to an employer on the operation of the scheme, helping the employer enrol employees and advising employees about membership of the scheme.

The full guidance can be found on the HMRC website.

Hargreaves Landsdown head of pensions research Tom McPhail (pictured) said was pleased that HMRC had clarified what would and would not be an unauthorised member payment.

“They seem to have taken a fairly pragmatic view,” he said.

“Consultancy charging is necessary in some cases to cover the cost of implementation, but where a member is being asked to pay for a service, it’s vital that there’s absolute clarity about what service is being provided and what the member is paying for that service.

“As far as possible much of any consultancy charge should be devoted towards giving the member good quality communication, good quality engagement, and helping the member to get the best possible value out of their retirement savings.”

The clarifications come after insurers raised concerns that members of schemes could be subject to unauthorised payment charges when the Retail Distribution Review is implemented in January.

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

5m Emma Smith, Managing Editor
Finance Bill 2017: Corporate tax reporting requirements 'a burden'

Business Regulation Finance Bill 2017: Corporate tax reporting requirements 'a burden'

11m Stephanie Wix, Writer
PAC raises “serious concerns” about HMRC’s digital plans

Corporate Tax PAC raises “serious concerns” about HMRC’s digital plans

12m Stephanie Wix, Writer
HMRC collects record £5bn in inheritance tax

HMRC HMRC collects record £5bn in inheritance tax

5m Emma Smith, Managing Editor
The top three issues that the next government must address for accountants

Making Tax Digital The top three issues that the next government must address for accountants

5m Emma Smith, Managing Editor
HMRC cuts over 150 offices to reduce running costs

Corporate Tax HMRC cuts over 150 offices to reduce running costs

10m Stephanie Wix, Writer