The financial services industry should advocate for the fair treatment of victims of Ark schemes and push for necessary reforms, Pension Scams Industry Group chair, Margaret Snowdon, has argued.
Snowdon’s call to action follows a recent update from Dalriada which is acting as trustee of Ark schemes.
Dalriada announced that it is calculating individual tax charges and HMRC will start communicating these charges and agreeing payment plans directly with members of the Ark schemes from September 2024.
No compensation has yet been received by Dalriada but it is expected in the first half of 2025.
Dalriada also announced that it will transfer the compensation along with remaining funds of the Ark schemes to an authorised master trust run by Standard Life, who will then pay the benefits to the scheme members in the usual way.
Loans received by members as part of the transfer to the Ark schemes will be offset against the compensation, so there will be no need to physically repay those loans.
While Snowdon described the announcement as “factually correct” she pointed out that it is set against a background of confusion and misinformation and a desperate need by victims to understand what has happened to them.
She warned that, as a result, members of the Ark schemes are worried about the outcome.
“They have pleaded for help ever since regulated financial advisers advised them to transfer their benefits into the Ark schemes in the early 2010s only to discover that they had been defrauded by those trusted advisers and scheme managers,” she said.
Snowden acknowledged that, as the calculations are yet to be finalised, it is “impossible” to know what victims will receive.
However, she specified that victims will not receive cash but will be granted a pension fund with Standard Life based on a proportionate share of the overall compensation less any loan amounts already received.
It is expected that the final calculations will be completed and transferred to Standard Life by end March 2025.
Snowdon therefore recommended that authorities such as HM Revenue and Customs should accept that where dishonesty by scheme managers or agents results in losses to a scheme or individuals, victims are not to blame unless specifically proven otherwise.
Additionally, Snowdon called on HMRC specifically to take steps to support victims, recommending that it should waive interest charges while a tax charge remains “proactive” pending a final determination.
She also recommended that HMRC should redefine unauthorised payments to exclude payments paid to incentivise an individual transfer to a scam arrangement, where that payment is returned to the scheme or offset against future scheme benefits.
Lastly, she recommends that HMRC should be bound by a time limit to collect tax and not use devices to keep matters ticking on without finalisation.
“Four years after the tax year of the event should be sufficient to establish the validity of a charge,” she said.
tom.dunstan@ft.com
