HMRC demands pension liberation victims pay up
HM Revenue & Customs (HMRC) has asked victims of pension liberation scams to settle outstanding tax bills, which could total millions of pounds.
The tax body has written to people who were under 55 and accessed their pension pots, according to the Telegraph.
Pension liberation schemes allow people to access their pension savings before the age of 55. Savers who did this face a 55% tax charge on the amount they withdrew, and potential penalty fees to increase it to 70%.
People who receive a letter have 30 days to appeal the charge and can postpone the bill until the end of the appeal. However, they could incur interest and extra penalties for the duration of the appeal.
Pension liberation becomes fraud when individuals are misled over the 55% tax charge HMRC will levy on unlocked funds, the fees charged by the receiver scheme operators, or how the remainder of their pension savings are invested.
A number of people lost money as a result of entering such a scheme. However, HMRC said it had no power to waive tax charges when someone was the victim of a pension liberation scam.
HMRC said: a�?We apply the tax legislation fairly and consistently in line with the rules. Tax reliefs are given to support the building up of a pension pot for later in life which is why accessing it early through a so called ‘pension liberation scheme’ can mean a significant tax charge.a��
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