RPSM04301080 - Scheme Administrator Pages: Taxation: Tax and penalties payable by the administrator Penalties: More details about penalties

More Details about penalties

Penalties relating to fraudulence or negligence

There are a number of penalties that the scheme administrator may be liable to relating to the 'fraudulent or negligent' provision of incorrect information or documents. It is clear what is meant by 'fraudulence' and this is, in any case, very rare. It is far more likely that penalties relating to 'fraudulence or negligence' will be as a result of neglect on the part of the scheme administrator.

Neglect is not defined in the legislation and covers a whole range of offences from those that only just fall short of fraud to simply carelessness. Neglect does not need intent so the fact that the scheme administrator did not intend to provide incorrect information or incorrect documents does not, in itself, prevent a penalty.

The Pension Scheme Return: Penalty provisions

If the scheme administrator of a registered pension scheme fails to comply with a notice requiring them to make and deliver a pension scheme return together with any accounts etc. within the time scale required by RPSM12301410, the scheme administrator is liable to an initial fixed penalty of £100.

If the failure continues after the initial £100 penalty the scheme administrator is liable to a further penalty of up to £60 a day while the failure continues. As soon as the failure is remedied no further penalties will be imposed in respect of that failure.

If the scheme administrator fraudulently or negligently makes an incorrect pension scheme return or delivers any incorrect accounts, statements or other documents with a pension scheme return then the scheme administrator is liable to a penalty of up to £3,000.

Registered Pension Scheme Event Reports: Penalty provisions

When the scheme administrator has to make an event report to HMRC it must be made within the time scale set out in RPSM12301020. If the scheme administrator fails to submit the report in respect of any reportable event by the required date then the scheme administrator may be liable to pay an initial penalty of up to £300. If the failure continues the scheme administrator may be liable for further penalties of up to £60 a day. As soon as the failure is remedied no further penalties will be imposed in respect of that failure.

If the scheme administrator fraudulently or negligently makes an incorrect event return then the scheme administrator may be liable to a penalty of up to £3,000.

Penalty provisions for other requirements under the Registered Pension Schemes (Provision of Information) Regulations 2006

The same range of penalties as for the event report apply where the scheme administrator is required to provide information to a person other than HMRC. The occasions where the scheme administrator has to provide information to someone other than HMRC are included in

• RPSM12303000 for information to a scheme member
• RPSM12304000 for information following a member’s death
• RPSM12305000 for information to other scheme administrators
• RPSM12306000 for information to insurance companies

Registered Pension Scheme Record Keeping: Penalty Provisions

If the scheme administrator of a registered pension scheme fails to comply with the requirements to retain records as set out in RPSM12300020 then they will be liable for a penalty of up to £3,000.

Notices issued by HMRC: Penalty Provisions

RPSM12301730 explains what the penalties are for failing to comply with a notice or providing inaccurate information in response to a notice.

Accounting for tax return: penalty provisions

RPSM12301340 explains what penalties are due if the accounting for tax (AFT) return is not filed on time, or the tax due is not paid on time.

RPSM12301350 explains what penalties may be due for providing inaccurate information on an AFT return,

Winding up to facilitate payment of lump sums: Penalty provisions

Whenever a registered pension scheme winds up and HMRC consider that this has been done wholly or mainly for the purpose of facilitating the payment of winding up lump sums or winding up lump sum death benefits (or both) then the scheme administrator is liable to a penalty.

The size of the penalty will be up to £3,000 in respect of each member to whom a winding-up lump sum has been paid, plus up to £3,000 in respect of each member in respect of whom a winding-up lump sum death benefit is paid.

Transfers to insured schemes: penalty provisions

Where a transfer representing a member's rights under a registered pension scheme is made to an insured scheme then the scheme administrator of the transferring scheme must comply with the conditions set out in RPSM12305010.

If these conditions are not complied with the scheme administrator of the transferring scheme is liable to a penalty of £3,000.