Due to the nature of my work and my internet searches, and the fact that I have a non-UK IP address, the search engines push QROPS adverts at me on a daily basis.
A significant number of these refer to QROPS (Overseas pensions that accept UK pension transfers) that are “Approved” or “Fully HMRC Approved”.
So, the public can rest assured that the product and service the offshore advisers are offering meets with the approval of HMRC?
Think again!
HMRC could not make it clearer. On their website, in bold type, HMRC states on their monthly QROPS list- “The list is not to be taken as a recommendation for a particular scheme or product. Nor should it be taken that any scheme featured on the list is approved or backed by HMRC”
One QROPS website I have just looked at, mentions the word ‘Approved’ an amazing 20 times on just ONE of their pages ( 13 times on the next page) , thus reinforcing something that is clearly not true in the eyes of the UK tax office. The firm even claims its transfer procedure is HMRC approved.
There is a clear attempt to mislead and provide customers with some sort of fake accreditation.
I have heard of a situation recently where an offshore firm of advisers sent a copy of a letter from HMRC to confirm recognition of QROPS status to a customer, but the firm referred to it as an “approval letter”. I am sure the customer was unaware of the significance of the difference.
There is a huge difference, but in many cases the public will just not notice this sleight of hand. In the case in question, the client is at risk of losing over half his pension in taxation and fees.
Of course, no warning of this was given when the advice was delivered. Why would it be? It was all ‘HMRC Approved”.
Sample definitions of these important words-
Approve- Officially agree to or accept as satisfactory
Recognise- Identify (someone or something)
Is there such a difference in the meaning of these words? Perhaps a simple sentence will help-
“He recognised the person responsible, but he did not approve of his actions’’
Do not deal with any firm of advisers that states that the QROPS, or advice process they offer, are HMRC approved.
Next Blog; The problem with bathwater and a large plughole!