RPSM04302040 - Scheme Administrator Pages: Taxation: Appeal and claims rights and similar rights of the scheme administrator: Right to apply for a release from liabilities on ceasing to be the scheme administrator

Right to apply for a release from liabilities on ceasing to be the scheme administrator

Liability of scheme administrator

Where a person who has been appointed as the scheme administrator of a registered pension scheme ceases to act in that capacity, another person will normally be appointed as the scheme administrator instead. The new person appointed as the scheme administrator will assume all of the tax-related liabilities of the person who was appointed as the scheme administrator, apart from any existing liability to pay a penalty, which will remain with the person who was appointed as the scheme administrator.

If a person ceases to act as the scheme administrator and no other person is appointed to act as scheme administrator instead, the person who was appointed as the scheme administrator (but has since ceased to act in that capacity) retains all of the tax-related liabilities of the scheme administrator until such time as either:

• another person is appointed as the scheme administrator,
• the person who was appointed as the scheme administrator dies (where the person is an individual), or
• the person who was appointed as the scheme administrator ceases to exist (where the person is a corporate body)

Applying for a release from tax-related liabilities

Any person who was appointed as the scheme administrator of a registered pension scheme who has retained tax-related liabilities after ceasing to be the scheme administrator, on account of no other person being appointed as the scheme administrator, may apply to be released from those liabilities.

The application must be made in writing to an Officer of HMRC and must

• show the income tax to which the person who was appointed as the scheme administrator is liable,
• include such particulars of the events or other circumstances giving rise to the liability (including particulars as to the persons to whom the events or other circumstances relate) as would have been required to be included in returns under S254 FA 04 if the person who was appointed as the scheme administrator had continued as the scheme administrator, and
• contain a declaration to the effect that all of the particulars given are correctly stated to the best of the information and belief of the applicant.

The application should normally be made by the person who was appointed as the scheme administrator but exceptionally, the trustee, guardian or receiver may make an application in respect of an incapacitated person. For this purpose an incapacitated person is defined in section 118 of Taxes Management Act 1970.

Time limit for making an application

The time limit for a person who was appointed as the scheme administrator to make an application for release from tax-related liabilities is:

• where there has been an assessment made under section 36 Taxes Management Act 1970 (sometimes known as a 'discovery assessment'), within two years of the date on which the assessment was made.
• where there has been no discovery assessment and the person is a company, no later than 6 years after the end of the accounting period to which the application relates
• where there has been no discovery assessment and the person is not a company, no later than five years after 31st January next following the year of assessment to which the application relates

Errors and mistakes

If the applicant subsequently discovers that an application for release from tax-related liabilities contains an error or a mistake then they may make a supplementary application in the same manner and within the same time limit as was allowed when they made the original application.

HMRC decisions on receiving an application from a former scheme administrator for release from tax-related liabilities

On receiving an application from a person who was appointed as the scheme administrator of a registered pension scheme to be released from tax-related liabilities, HMRC must decide whether to release that person from the tax-related liabilities covered by the application.

The person’s right to be notified about the HMRC decision is set out in RPSM04302050 and their rights of appeal against the decision are set in RPSM04302060.