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My IFA resuscitated my SSAS

It’s estimated that responsibility for the administration of about 5,000 SSASs passed to individual members when a number of life offices pulled out of the SSAS market from A-Day. That means there could be over 10,000 people whose retirement provision is at risk. Putting it another way, that’s 10,000 or more potential clients who need your help to protect their retirement plans. 

There is every chance these individuals are unaware of the consequences of not doing anything with their SSAS. It is almost certainly not their area of expertise and they are naturally consumed with the task of running their company and can be forgiven for ignoring letters written in confusing language. However, at 6 April 2006 the pension rules changed and, as it turned out, have continued to change rather a lot.

This is topical because it has been reported in the press that HMRC has drawn up a list of SSASs which it believes are not being administered in line with its regulations. We believe many of these will be pre A-day SSASs, originally set up by life offices, which no longer have a professional trustee.  

Problem areas

Let’s take a few examples of the damage these potential clients might, in blissful ignorance, be doing to the health of their scheme:

  1. SSAS loanbacks made prior to April 2006 were generally straightforward.  Do company directors know that new loans have to be fully secured by way of first charge before the loan is advanced? 
  2. There is great responsibility placed on being a Scheme Administrator, with tax penalties for late reporting or inappropriate payments from the scheme. Do lay trustees know when or how to file HMRC reports online? 
  3. Pension legislation has been updated substantially in 2006 and 2011 as well as minor tweaks in between.  Are the trustees ensuring that their scheme rules are being kept up to date? 
  4. Are lay trustees providing key pieces of information to members at and during retirement? 

These are not just academic questions. Non-compliance could be expensive.

Case study

Let’s assume the SSAS trustees provide a loan of £200,000 to the SSAS’s sponsoring company. The SSAS is worth £600,000. The company needs the money urgently to fulfil a new order and the trustees don’t know they have to have a first charge security in place before the funds are advanced. They decide to worry about the paperwork later as the new customer is important.

Whilst the 50 per cent limit on sponsoring company loans has been adhered to, the loan is not secured at outset meaning HMRC would treat the loan as an unauthorised payment. The company would be liable to an unauthorised payment charge of 40 per cent and the SSAS would be liable to a scheme sanction charge of 15 per cent. That’s £110,000.

The unauthorised payment is also in excess of 25 per cent of the value of the SSAS. This would mean an unauthorised payment surcharge of 15 per cent (another £30,000) payable by the company plus a heightened risk of the SSAS being de-registered if HMRC thinks that the SSAS isn’t being managed properly.


The damage can be significant. This means that you can add real value to clients by helping to make sure their SSAS is being properly managed and put into good order before transfers away if another pension vehicle, such as a SIPP, is considered more appropriate. 

If you would like to help your clients assess some of the risks they might be taking with their SSAS, Barnett Waddingham has launched an online tool which will be of interest to you.  It’s called the SSAS Health Check and is completely free to use. Completing the 10 question health check could be a good way of enhancing your service proposition to your client base.

The health check can be found at

HMRC is beginning to inspect schemes, possibly as part of a tax-raising exercise.

A recent survey at an industry conference run by AMPS, the SSAS trade body, revealed that 46% of delegates had schemes that have been audited by HMRC with investment transactions accounting for 65% of enquiries.   HMRC takes more kindly to schemes that are actively resolving issues before they start their audit process, so it is best to get started before HMRC opens an enquiry.


Mark Pipe

Barnett Waddingham LLP

[Sponsored article by Barnett Waddingham LLP]



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Author: IFA Life Sponsored Post
Posted: Monday, December 03, 2012 | 2:13:48 PM

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