PSI18.1.19 - Application for Approval and Information Provisions: Application for Approval - Date of Approval - Tax Position Before Approval

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Where a scheme is approved from a date later than its commencement because of a late application, there is strictly a section 595 liability relating to the period before the scheme's approval. But if we imposed a section 595 charge on the employee for this period the scheme would probably be wound-up and replaced by a new one and any tax collected would then be repayable (section 596(3)). The Inspector of Taxes may therefore in such cases consider on an individual case by case basis the waiver of the S595 (1) liability for the period between commencement and approval if:

1. the employees are not responsible for the delay in applying for approval, and either
2. the scheme documents contain no unapprovable features, or
3. any unapprovable features in the original executed documents are removed before they have been acted upon.