Guidance

Pension schemes newsletter 114 – October 2019

Published 30 October 2019

1. Registration statistics

For the period 6 April 2019 to 30 September 2019 HMRC received in total 903 applications to register new pension schemes. This is a 2% reduction compared to applications received in the same period last year.

Of these applications, 73% have been registered and HMRC has currently refused registration for about 11% of applications. No decision has yet been made on the remainder.

2. Pension flexibility statistics

The quarterly release of official statistics on flexible payments from pensions for the period 1 July 2019 to 30 September 2019 has been published.

HMRC can now give more information on the number of tax repayment claim forms processed for pension flexibility payments.

From 1 July 2019 to 30 September 2019 we processed:

Form number	Number of forms
P55	10,379
P53Z	5,253
P50Z	1,753

Total value repaid: £ 54,975,821

Figures for the period 1 October 2019 to 31 December 2019 will be published in January 2020.

3. Pension scheme administration - moving pension recipients from one payroll to another

We’re planning to update the ‘less common circumstances’ section of our GOV.UK guide paying a company pension or annuity through your payroll but we’re not yet able to confirm when these changes will be published. We are sharing an early version of the amended guidance, as follows. This guidance is not final but any changes will be minor and will not affect the substance.

We’ll let you know when this guide has been updated in a future newsletter.

Moving pension recipients from one payroll to another

If you’re moving pension recipients from one payroll to another and you need a new PAYE reference you should:

• transfer the payroll records to the new employer reference
• send an Full Payment Submission (FPS) under the old employer reference with leaving details, including the year to date pay and tax figures. You should not prepare P45s
• send an FPS under the new employer reference restarting the year to date figures from zero *put the full starting details for each recipient on the FPS for the new reference and include the:
  • start date for the new payroll
  • annual amount of their pension
  • occupational pension indicator
• leave the occupational pension bereavement field on the FPS blank, unless you’re paying the pension to a dependent who’s been bereaved since the pension recipient joined the new payroll
• work out and deduct PAYE tax from any payments you make to the transferred pension recipients from the date they moved payrolls
• If you’re operating a cumulative tax code use the pay and tax details from the old employer reference

You must submit the last FPS from the old reference before you submit the first FPS for the new reference. If you’re unable to do this you should contact HMRC’s Employer Helpline.

You should also phone the Employer Helpline at least 2 months before the scheduled transfer if you’re moving members receiving pension payments from one payroll to another under a new PAYE reference and they:

• receive more than one pension under the existing PAYE scheme which are paid under separate payroll IDs and this arrangement continues under the new PAYE scheme
• have multiple pensions paid under one payroll ID at the old reference but will be paid under separate payroll IDs at the new reference.
• who have a suffix T code, including 0T and NT
• are paid in advance and the month 12 FPS shows an end date which falls in the following tax year. For example, a pay date of 01/04 and an end date of 30/04

We’ll contact you within 15 working days for further information about these cases. We’ll review these cases and, if appropriate, we’ll issue revised tax codes after the transfer has taken place.

4. Relief at source

4.1. Annual return of information for 2018 to 2019

We’ve seen an increase in the number of annual returns of information that are failing on submission. Many of these failures are because scheme administrators have used the wrong template for their annual return.

In Pension Schemes Newsletter 110 we provided links to the current versions of the relief at source spreadsheet and electronic flat text file specifications.

We want to remind all scheme administrators that if you still need to submit or resubmit your annual return of information for 2018 to 2019 that you should use one of the following:

• the 2019 version of the relief at source spreadsheet
• the 2019 version of the electronic flat text file specifications
• the 2018 version of the relief at source spreadsheet
• the 2018 version of the electronic flat text file specifications

To make sure that we can process your annual return of information, you should always use the versions of the spreadsheet and electronic flat text file specifications that are currently on GOV.UK and not a version that you’ve saved from a previous year.

Although the information on the published 2018 version of the relief at source spreadsheet on GOV.UK has not changed and this version of the spreadsheet does not look different to versions from previous years, we’ve made some slight formatting changes to this version to help us process your return. Using an older version of the spreadsheet could mean that we cannot process your return and this could fail.

It’s important that you also make sure that you use the correct naming convention when you submit your annual return through Secure Data Exchange Service and that the file name reference matches the sub reference included in the return.

You can find details of how you should name your files on the information we publish about using each version in the links above.

4.2. Annual return of information – notification of residency status reports

If you need to submit an annual return of information for 2018 to 2019 and you haven’t already done so, it’s really important that you successfully submit this as soon as possible. Without this we’ll be unable to give you a notification of residency status report in January 2020.

You can find more information about the notification of residency status reports our GOV.UK guide check a pension scheme member’s residency status for relief at source.

5. Guaranteed Minimum Pension (GMP) Equalisation

As we explained in Pension Schemes Newsletter 111, the HMRC GMP Equalisation Working Group has been exploring a number of pension tax issues that arise from GMP equalisation. We want to update you on the progress we’ve made so far and our plans going forward.

We’ve been focussing on trying to resolve tax issues caused by GMP equalisation, using the existing pension tax legislation and supported by further guidance as appropriate. This is a complex piece of work and we may not be able to resolve all of the issues in this way. We may need to consider some individuals on a case by case basis depending on their particular circumstances.

Whilst pension schemes do not have to use a particular methodology to equalise GMP scheme benefits, in December 2019 we’re aiming to publish HMRC guidance specific to GMP equalisation on:

• lifetime allowance (LTA)
• LTA protection regimes including enhanced, fixed, primary and individual protection
• annual allowance

This guidance will be high-level and specific to GMP equalisation only. For schemes choosing to equalise through conversion, a method that converts scheme benefits into a new form of benefit, the issues are proving more complicated to resolve and we continue to explore these.

The Working Group continues to work on other pension tax issues including the payment of crystallised lump sums, such as serious ill-health lump sums, small pots and trivial commutation. We’re aiming to provide a further update on our progress on these issues and let you know when we plan to provide more guidance in our December 2019.

The Working Group will continue to work through the tax issues and we’ll issue further updates and guidance as soon as we can.

6. Annual allowance - GOV.UK guidance on ‘scheme pays’

As part of the work we’ve been doing on our GOV.UK guidance we’ve published a new guide about paying the annual allowance tax charge for pension scheme members. The guide who must pay the pensions annual allowance tax charge has information about ‘mandatory’ and ‘voluntary’ scheme pays and provides links for members on declaring their annual allowance charge on their Self Assessment return.

We’re continuing to work on our annual allowance guidance and we’ll provide further updates in future newsletters.