(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)
Cancellation of approval is withdrawal of approval ab initio
– back to when approval was originally effective. The result
is that the scheme is regarded as if the scheme has never been
approved. Cancellation of approval will normally only be
appropriate if the original basis of scheme approval is called into
question, e.g. new information is provided.
Where a scheme has been approved and,
scheme approval should normally stand.
Where some event has occurred which calls into question the
continued approval of the scheme (as opposed to the basis of the
original approval) withdrawal of approval should be considered.
(See 19.1.1- 3.)
Sometimes IR SPSS receives a request to abandon an approved
scheme that is no longer required by the employer. Even where a
scheme fulfils the normal abandonment criteria (set out in 16.1.3)
the scheme may not be abandoned. To abandon an approved scheme
requires the scheme approval to be cancelled.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
Where there is no reason to suggest that the original scheme
approval was given incorrectly the scheme approval should stand and
abandonment cannot take place. (This will be, the case for most
requests.) If the employer no longer needs the scheme it should be
made paid up or wound up in accordance with the scheme rules.
Occasionally after exempt approval has been granted, information comes to light to show that the scheme should not have been approved. This can be because either IR SPSS did not have the power to approve the scheme or it is contrary to normal discretionary practice. For example, it is discovered that an alleged employee covered by an individual arrangement is in fact a self- employed person taxed under Schedule D. As the member is not an employee, the scheme is not a retirement benefits scheme as defined in Section 611 ICTA 1988 (approval can only be given to retirement benefits schemes). The IR SPSS does not therefore have the power to approve such schemes and the approval may be cancelled on the authority of the Compliance B2. Cases where approval may be cancelled will be rare (see 19.1.20).
If the scheme should not have been approved, but the information was available at the time the scheme was approved, then we have incorrectly exercised our discretion to approve a scheme. If there has been no change in the conditions which existed when approval was granted, we are unable to cancel the approval. For example, a scheme was approved under Section 591 ICTA 1988, but the members were all directors of an investment company and this had been fully disclosed to IR SPSS. In such cases we may only impose conditions upon the continuing approval of the scheme; for instance, the scheme must be made paid up from a current date. Refer such schemes to a C1 for advice.
