SIPP and SSAS provider body the Association of Member-Directed Pension Schemes (AMPS) has warned that an increasing number of Small Self-Administered Schemes (SSAS) approvals are being rejected by HMRC.

Its members have reported rejections on new schemes looking to be authorised and also delays in communication to them from HMRC regarding the reasons. 

The Association said the delays are unacceptable and frustrating for both the SSAS administrator and also pension scheme members as few details are given as to why they are being rejected.

It said that when HMRC is questioned about the reasons for the rejections, many appear to be due to the data for the scheme and the individuals tax records not matching.

It said  the HMRC system doesn’t show why it was rejected, just that it is a data mismatch, which creates delays and frustrations for everyone involved.

AMPS said SSAS administrators and any other advisers involved in the setting up of the scheme, to highlight to the scheme members that they should review and update their personal tax account online on the Government website.

It said some people don’t know about the personal tax account held and so it is very easy for an address to be out of date which will cause the whole scheme to be rejected.

AMPS also recommended that HMRC should be more open about changes it makes to its systems so that users can take steps to prepare for any change in approach they may need to make.

Andrew Phipps, chair of AMPS, said: “We are becoming increasingly concerned that HMRC are rejecting new SSAS approvals. Having drilled down into this with members, it has become clear that this is due to the individual pension scheme members not updating their personal tax account online. 

“We will be working with HMRC to see if there is a way to make this process easier and that they can provide transparency on why the scheme is being rejected, rather than a statement saying that the data doesn’t match.”   

AMPS has 120 member firms representing SIPP providers, SSAS practitioners, pension lawyers, software developers, banks and investment houses.