In February 2016, HMRC announced that after 5 April 2016 they would only accept requests for data via the Scheme Reconciliation Service (SRS) in exceptional circumstances.
In Countdown bulletin 19, a further HMRC announcement confirmed that, with effect from 5 August 2016, they would not be accepting any new requests for data under any circumstances, citing only a small number of special requests for late submissions since the April 2016 deadline passed.
"It’s vital that SRS data is requested as part of the implementation process to ensure that the GMP reconciliation exercise can continue."
As a company, Barnett Waddingham has put a lot of effort into ensuring that all the schemes we administer were registered for SRS prior to the April 2016, however, even with all our preparation we have still had to rely on the late submission process on a couple of occasions.
- we took over the administration of a scheme where the previous administrators had not submitted a request to HMRC
- we had a multi-employer scheme where one employer had several reference numbers with HMRC, we did not become aware of one of these until after the April deadline
In both of these cases HMRC were very helpful and provided SRS data after the initial deadline; but what happens if one of these schemes comes out of the woodwork in the future?
For new scheme take-ons HMRC’s position is that the new administrator is responsible for obtaining the SRS data from the old administrator. It’s vital that SRS data is requested as part of the implementation process to ensure that the GMP reconciliation exercise can continue.
If there is no data available, HMRC’s GMP Checker can be used, which will provide GMP details for any members it is requested for. The problem with this approach is that data will only be received for members with scheme records and won’t identify 'ghost' members who HMRC think have a GMP the scheme was not previously aware of.
Arguably, the membership reconciliation is the most important part of the whole GMP reconciliation process and if a scheme finds itself in a position where it has to perform a GMP reconciliation using the GMP Checker tool then they will need to negotiate further with HMRC to ensure they are aware of all of the members that HMRC believe are in the scheme.
Only time will tell how ready the industry is to deal with issues that may arise from this change. How much it will affect schemes will depend on how future implementations are handled and how ready other administrators are to provide their SRS data and any progress made in a user friendly format.
Communication between old and new
Assuming that the old administrators are able to provide new administrators with the SRS extract they received from HMRC this change shouldn’t impact on a scheme’s ability to reconcile GMPs too much – the SRS extract will give the information required to do the membership reconciliation and HMRC’s GMP checker can be used to review any progress that has been made to date in reconciling the GMPs.