Do SIPPs need to be registered with HMRC? The pension itself must be, and the provider arranges it; if it is not, you do not get tax relief.

Do SIPPs need to be registered with HMRC?

Yes, in the sense that matters to you as a saver. HMRC's guidance for pension administrators says: "A pension scheme must be registered with HMRC to benefit from the tax reliefs available to pensions". That applies to a SIPP as it does to any other pension, so the registration is what makes tax relief on your payments possible.

GOV.UK's tax relief guide puts the consequence from the saver's side: "You cannot claim tax relief if your pension scheme is not registered with HMRC." Paying into a SIPP soon? An FCA-authorised adviser will check the provider's registration details with you, and what they mean for your tax relief, on a free call; SIPP savers ask for theirs on the form on this page.

The registration does not belong to you personally. It belongs to the scheme, and it is somebody else's job to obtain it, as the next section explains.

Who registers a SIPP: you or the provider?

Not you. HMRC's guidance is that "Only the scheme administrator can apply to register the pension scheme." The administrator must itself register with HMRC as a scheme administrator before applying. In practice that means the company running the pension, so a member who opens a SIPP with a provider does not fill in anything for HMRC.

The same guidance lists the kinds of scheme that can apply. One is a scheme "set up with permission under the Financial Services and Markets Act 2000 to establish a personal pension or stakeholder pension scheme, such as a bank or insurance company"; the other two are employers' occupational schemes and public sector schemes. Setting up a pension of this kind therefore depends on the provider holding the right FCA permission as well as HMRC's approval. For the pension itself, see what a SIPP is and how it works.

What happens between application and approval

An application is not a registration. After it goes in, the guidance says: "Your scheme is not registered at this point. Tax relief on pension contributions can only be given if a scheme is formally registered." Money received in that gap does not qualify for relief, and transfers in from another registered scheme are treated as unauthorised payments. HMRC's guidance says there is no time limit on how long it can take to decide, though if it has not decided within six months the administrator can appeal to a tribunal.

When HMRC agrees, the certificate it posts to the administrator shows the registration date and the scheme's Pension Scheme Tax Reference, known as the PSTR. It is the provider's paperwork, so the provider is who you ask.

What registration does and does not tell you

It tells you the scheme can give tax relief and is inside HMRC's pension tax rules. It says nothing about whether the investments are good, the charges fair or the firm sound. GOV.UK says so directly on its transfer page: "If schemes are registered with HMRC for tax purposes, it does not mean they are endorsed by government."

Registration is also separate from authorisation by the Financial Conduct Authority. One is a tax status held by the scheme; the other is permission for a firm to carry on regulated business. A sensible check looks at both, which is the subject of the next section. If you are weighing a SIPP against a simpler plan, personal pension vs SIPP compares what each involves.

How to check that a SIPP is registered

Start with the provider. GOV.UK's guide to personal pensions says: "Check with your provider that your pension scheme is registered with HM Revenue and Customs (HMRC) - if it’s not registered, you will not get tax relief." Ask them to confirm it in writing and to give you the scheme's PSTR, the reference printed on the certificate described above.

Then look the firm up. The FCA describes its Firm Checker as a tool that "makes it easier to check if a firm is authorised and has permission for the service it's offering you."

Warning signs

The FCA's pension scams page says: "If you’re contacted unexpectedly and offered a free pension review, it’s likely to be a scam." It also says not to take advice from the company that made the approach. Where a scheme is used to get money out of a pension early, the FCA warns of "a tax bill of 55% on what you withdraw", even where the saver did not know the rules had been broken. More is in pension scams and how to spot them.

Which HMRC rules apply to a SIPP once it is registered?

Registration brings the pension within a set of tax rules. Those most relevant to a SIPP holder are below, each with the page that covers it fully.

  • Tax relief on payments in. How it is added and who claims it is explained in pension tax relief and relief at source vs net pay.
  • Limits on what you can pay in. The yearly cap is the subject of the pension annual allowance, which is the page to use for any figures or calculator-style questions.
  • Unauthorised payments. HMRC's manual says: "The tax rules specify the conditions that need to be met for payments to be authorised. Any payment that doesn't meet these conditions is an unauthorised payment." That is why taking money out in a way the rules do not allow is taxed more heavily.
  • Borrowing. Borrowing by a SIPP has rules of its own, set out in SIPP borrowing rules.

Investments HMRC treats as taxable property

Because a SIPP lets the holder choose the investments, one rule deserves a separate mention. HMRC defines an investment-regulated pension scheme as "one where the member is able (whether directly or indirectly) to direct or influence the manner of investments the scheme makes", and a SIPP may fall within that test. If such a scheme acquires taxable property, directly or indirectly, the manual treats it as an unauthorised payment to the member whose arrangement acquires the asset. Taxable property means residential property and tangible moveable property, which the manual says includes art, antiques and classic cars; investment grade gold bullion is specified as an exception. Thinking of holding property, art or other physical assets in a SIPP? An FCA-authorised adviser can say, without charge, how these rules bear on it; property questions like this suit the form on this page.

Registration also does nothing to protect what the money is invested in. The Financial Services Compensation Scheme says: "We can't accept any claims that are for poor investment performance - unfortunately, the nature of investments means their value can go down as well as up." A SIPP can therefore end up worth less than was paid into it.

SIPP registration queries, answered

Do I have to send HMRC anything when I open a SIPP?

No. Only the scheme administrator can apply, and that is the provider running the pension. A member's part is to pay in and keep the provider's paperwork, including the PSTR.

What is a PSTR?

It is the Pension Scheme Tax Reference, issued with the registration certificate that HMRC sends once it registers a scheme. Quote it when you ask a provider to confirm registration.

Does HMRC approve or recommend a SIPP once it is registered?

No. Registration is a tax status and GOV.UK says it is not an endorsement by government, so charges, investments and the firm's standing still need your own checking.

Does registration make my SIPP investments grow tax-free?

Registration is what brings a pension inside HMRC's tax rules, so the reliefs depend on it. How growth inside the pension is treated, and what is taxed when money comes out, is covered in whether growth inside a pension is tax-free.

Does a SSAS need registering too?

Yes. The rule that a scheme must be registered to get the pension tax reliefs covers every kind of pension, not only SIPPs. A SSAS differs in having trustees and reporting duties of its own: setting up a SSAS covers registration, and SSAS pensions and HMRC the reporting.

Before you pay into a SIPP

Last of all, jot down the PSTR and search the FCA's register. For anything else, an FCA-authorised adviser will ring about your own plans free of charge once your name and number are in the form on this page. Free government-backed guidance is also available from Pension Wise.