SIPP (Self-Invested Personal Pension) providers are warning that existing HMRC rules are prohibiting them from permitting customers to invest in peer-to-peer lender platforms in the UK’s alternative finance sector.

Although some peer-to-peer lenders began signing distribution deals with SIPP firms from April this year, other providers claim that HMRC rules aimed at stopping members of the same pension schemes from lending to one another will hit savers with unauthorised payment charges. Even P2P platforms providin low-risk secured asset loans could be affected.

Gareth James, who heads technical services at online investment platform AJ Bell, said:

“With HMRC’s connected party rules, you could be treated for breaching rules if the people lending to each other are holding a SIPP under the same registered pension scheme. It’s potentially a very widely applicable rule and, when you’ve got SIPP firms with tens of thousands of customers all in the same registered scheme, it’s a risk you can’t control.”

His counterpart at pension provider Dentons, Martin Tilley, said that it was not sufficient for SIPP providers to state that they were holding an investment in a peer-to-peer lender platform; they are also obliged to know where the underlying investment is. Tilley said:

“How can you possibly know where the money is ending up?

“It’s like investing in a DFM – they need to tell you whether they are investing in regulated or unregulated assets. P2P does not fit into SIPPs at the current time.”

Mark Hayes-Newington, commercial director of European Pensions Management, insists that there is no problem with either pooled or segregated loans. However, he added that his company is currently lobbying HMRC to provide clearer guidance.