Guidance

Pension schemes newsletter 101 - July 2018

Published 31 July 2018

1. Master Trusts

As a pension scheme administrator you must tell HMRC if your scheme becomes or ceases to be a Master Trust within 30 days of either event. You, or your practitioner, can tell us on the APSS578 form.

From 1 October 2018, a new authorisation regime comes into effect for Master Trusts. Master Trusts operating at that date will have to apply for authorisation from The Pensions Regulator (TPR) within a 6 month application period. If they do not obtain authorisation they will not be able to operate and will have to wind up.

HMRC will also be able to de-register a scheme which is a Master Trust and doesn’t receive or subsequently loses its TPR authorisation.

New Master Trusts commencing operation after 1 October 2018 can apply at any time, but cannot operate until authorised. If your scheme is a Master Trust under the Pension Schemes Act 2017, you should approach TPR for further information. HMRC can refuse to register a pension scheme that is a Master Trust and does not hold authorisation by TPR.

You can find more information about reporting pension scheme events in the Pensions Tax Manual at PTM161100.

2. Registering a pension scheme - time limits

This is to remind you that if you’re applying to register a pension scheme, there’s no time limit on how long HMRC can take to decide whether or not to register the pension scheme.

This is because we may need to ask further questions or ask you to give us additional information before we make a decision as to whether or not to register the pension scheme.

If we have not decided within 6 months of receiving your application, you can appeal to a tribunal as if we’d decided not to register the scheme. However you cannot appeal within 6 months of HMRC receiving your application to register the scheme.

You can find more information about the process for applying to register a pension scheme in Apply to register a pension scheme and in PTM032200.

3. Taxation of flexi access payments

In Pension Schemes Newsletter 100 we provided information about the current process for flexible pension drawdown payments and we referred to the revised CWG2: Further Guide to PAYE and National Insurance Contributions.

However due to a delay in updating the CWG2: Further Guide to PAYE and National Insurance Contributions, the references to new sections 2.2.6 and 2.2.7 hadn’t been published. We are sorry for any inconvenience caused and can now confirm that these have been published.

4. Annual allowance

Further to the article in Pension Schemes Newsletter 100 we can confirm that the pensions annual allowance calculator is now back online.

Your members can use the pensions annual allowance calculator to check if pension savings that they’ve made are more than their available annual allowance for the tax year. If the calculator results show a chargeable amount, your member must include this on their SA Return for the relevant tax year.

If you get questions from your members about their results from the pensions annual allowance calculator, please remind them that those results are based on the information that they’ve entered. So it’s important that your members enter the amounts of the pension savings they’ve made and do not use estimated amounts.

You can you use the pensions annual allowance calculator to help you.

You can also access this through the GOV.UK guides Check your pension scheme member’s annual allowance - GOV.UK and Tax on your private pension contributions.

5. Relief at source

If you’re operating a relief at source pension scheme, you must apply relief at source based on the residency status that HMRC gives you for each of your members. This is a legislative requirement and you must not apply a tax rate based on the member’s address.

We’ll tell you the residency status of each member in your annual notification of residency status report or you can use our service to look up the residency status of your member(s) for relief at source.

If you do not have a residency status for a member by the time you claim relief at source on their first contribution, you must treat them as having a ‘rest of UK’ residency status.

Once you’ve used a residency status to claim relief at source for a member, you must use this for the whole of the tax year. You must not change a member’s residency status for the current tax year after having made a claim for relief at source.

You can find more information about finding the residency status of existing and new members for relief at source in our GOV.UK guide Check a pension scheme member’s residency status for relief at source. This includes guidance for using our look up service to check the statuses of individual and multiple new scheme members.

HMRC will reconcile any difference directly with the individual at the end of the tax year and make any repayment owed as part of the normal PAYE process.

6. Pension flexibility

The quarterly release of official statistics on flexible payments from pensions for the period 1 April to 30 June 2018 has now been published.

Further to this, HMRC can now provide more information on the number of tax repayment claim forms (P55s, P53Zs and P50Zs) processed in respect of pension flexibility payments.

From 1 April to 30 June 2018 we processed:

• P55 = 9,558 forms
• P53Z = 3,614 forms
• P50Z = 1,305 forms

Total value repaid: £28,997,768

Figures for the period 1 July 2018 to 30 September 2018 will be published in October 2018.

7. Qualifying recognised overseas pension schemes (QROPS) transfer statistics

The annual release of official statistics on transfers to QROPS for the tax year 2017 to 2018 has now been published.

You can find more details at updates for HMRC statistics and statistics at HMRC.

8. Manage and Register Pension Schemes service - completing enrolment information

This is to remind pension scheme administrators that to avoid delay when you need to use the Manage and Register Pension Schemes service, you can log into the service at any time and complete your enrolment information to successfully complete your new online pension scheme administrator record.

You only need to do this once, the first time you log into the service. Make sure that you log in with the username and password for you as pension scheme administrator. You’ll then be asked to enter some information about you as scheme administrator, so please make sure you enter the details that match to the account you have logged on with.

Once you’ve completed your enrolment, you’ll get an online confirmation message that you’ve updated your details successfully. You’ll then be able to apply to register a pension scheme at any time.