RPSM02100060 - Technical pages: Registering a pension scheme with HMRC: pension schemes which exist at 5 April 2006: Application received on or after 6 April 2006, but approval required from a date before 6 April 2006

Application received on or after 6 April 2006, but approval required from a date before 6 April 2006

Under the approval procedures in place before 6 April 2006, HMRC could grant approval to some occupational pension schemes with effect from an earlier date than the date the approval letter was actually issued.

Strictly, the legislation required that the application should have been made before the end of the first tax year for which approval was needed. But because the Board accepted that some schemes might need further time to obtain the necessary details before making the application, a concessionary application period was introduced.

If the trustees or sponsors made the application for approval before the end of a six-month application period, HMRC would backdate approval to the date the scheme was set up. Under this concession, approval could be backdated, even if the scheme's establishment date was in an earlier tax year.

HMRC has retained powers to grant and backdate approval under Chapters 1 and 4 of the old tax legislation, where approval is to be given from a date prior to 6 April 2006, even though the tax regime for registered pension schemes has begun. There is still a concessionary application period, but schemes wanting to have approval granted with effect from a pre-6 April 2006 date may apply only until 30 June 2006. Any applications received after this date will be considered on a case by case basis. For more details, please see paragraph 2 of Pensions Tax Simplification Newsletter no 3, August 2005, which is published on the HMRC website at www.hmrc.gov.uk/pensionschemes/pts.htm.

HMRC may therefore issue an approval letter to a scheme after 5 April 2006, but with an effective date of approval before 6 April 2006 enabling the approval to stand until 5 April 2006.

As the scheme is then (retrospectively) approved "as at" 5 April 2006, it is treated under RPSM02100020 as satisfying the registration conditions automatically from 6 April 2006, even though it was not actually approved at that date. It is treated as a registered scheme from 6 April 2006.

If those running a scheme do not want it to be treated as a registered scheme from 6 April 2006 onwards, the relevant administrator must still notify HMRC in writing that the scheme will opt out of the new regime, even though the scheme has yet to be granted approval for the period up to 5 April 2006. This opt-out must be notified by 5 April 2006 at the latest, as explained in RPSM02100030.

It follows that if an application for approval from a date before 6 April 2006 is received on or after 6 April 2006, it is too late for the scheme to then opt out of the new regime.

So if the application for approval is likely to be sent in on or after 6 April 2006, the relevant administrator would have to have notified HMRC earlier that they did not want the scheme to be automatically registered.