UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

Section 239 is headed “scheme sanction charge” and begins:

“(1)

A charge to income tax, to be known as the scheme sanction charge, arises where in any tax year one or more scheme chargeable payments are made by a registered pension scheme.

(2)

The person liable to the scheme sanction charge is the scheme administrator.”

Section 255(1) provides:

“The Board of Inland Revenue may by regulations make provision for and in connection with the making of assessments in respect of—

(a)-(c)…

(d)

the scheme sanction charge…”

The Registered Pension Schemes (Accounting and Assessment) Regulations 2005 (“the Assessment Regs”) were made under the vires given by that subsection. Paragraph 4(1) provides that “in the cases listed in column 1 of Table 2 an officer of Revenue and Customs must issue an assessment to tax to the assessable person specified in column 2”. Column 1 then lists nine “Cases”, of which Case 4 is “a charge to tax arises under section 239 of the Act (scheme sanction charge)”, and the related text in column 2 provides that the “assessable person” is “the scheme administrator”.

The Assessment Regs do not set out the time limits within which assessments must be made; these are to be found in TMA s 34 and 36 because the scheme sanction charge is a charge to income tax, so the related assessment is to income tax, and both s 34 and 36 apply to “an assessment to income tax”.

TMA s 34 is headed “ordinary time limit of 4 years”, and subsection (1) reads:

“Subject to the following provisions of this Act, and to any other provisions of the Taxes Acts allowing a longer period in any particular class of case, an assessment to income tax or capital gains tax may be made at any time not more than 4 years after the end of the year of assessment to which it relates.”

TMA s 36 is headed “Loss of tax brought about carelessly or deliberately etc” and includes the following provisions:

“(1)

An assessment on a person in a case involving a loss of income tax or capital gains tax brought about carelessly by the person may be made at any time not more than 6 years after the end of the year of assessment to which it relates (subject to subsection (1A) and any other provision of the Taxes Acts allowing a longer period.

(1A)   An assessment on a person in a case involving a loss of income tax or capital gains tax ̶

(a)

brought about deliberately by the person

(b)-(d)…

may be made at any time not more than 20 years after the end of the year of assessment to which it relates (subject to any provision of the Taxes Acts allowing a longer period).”