© Crown copyright 2018
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: email@example.com.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/pension-schemes-newsletter-104-for-october-2018/pension-schemes-newsletter-104-for-october-2018
1. Autumn Budget 2018
At Budget the government confirmed that following uprating in line with the consumer price inflation, the amount of the pensions lifetime allowance for tax year 2019 to 2020 is £1,055,000.
2. Pension flexibility statistics
The quarterly release of official statistics on flexible payments from pensions for the period 1 July 2018 to 30 September 2018 will be published on 2 November 2018.
Ahead of this, HMRC can provide information on the number of tax repayment claim forms (P55s, P53Zs and P50Zs) processed in respect of pension flexibility payments.
From 1 July to 30 September 2018 we processed:
- P55 = 10,580 forms
- P53Z = 5,604 forms
- P50Z = 2,169 forms
Total value repaid: £38,252,931
Figures for the period 1 October 2018 to 31 December 2018 will be published in January 2019.
3. Registration statistics
For the period 6 April 2018 to 30 September 2018 HMRC received in total 923 applications to register new pension schemes. This is a 21% reduction compared to applications received in the same period last year.
Of these applications, 38% have been registered and HMRC has currently refused registration for about 8% of applications. No decision has yet been made on the remainder.
4. Manage and Register Pension Schemes service
a. Associating a scheme administrator and viewing pension scheme and scheme administrator details
From 13 November 2018 we’ll be adding new features to our Manage and Register Pension Schemes service.
On the service you’ll soon be able to:
- view the details of your schemes
- view your details as scheme administrator
- invite other scheme administrators to be associated to your scheme
- accept an invitation from another scheme administrator to be associated to a pension scheme
We’ll update our GOV.UK guidance to reflect these additional features and we’ll include an update in the next pension schemes newsletter.
So that we can add these features to the service, we’ll take the Manage and Register Pension Schemes service offline on 10, 11 and 12 November 2018. But you’ll be able to use the updated service from the 13 November 2018.
b. Reporting for schemes registered on the Manage and Register Pension Schemes service
As we explained in the Manage And Register Pension Schemes Service Newsletter – June 2018 newsletter we’ll be introducing pension scheme reporting when we deliver the second phase of the service in 2019.
This means that if your scheme was registered using the Manage and Register Pension Schemes service you cannot currently file an accounting for tax (AFT) return for that scheme online. Instead you should email firstname.lastname@example.org with:
- scheme name
- Pension Scheme Tax Reference (this will start with a ‘2’)
- charge types that you need to report
- your contact details
You should put ‘Manage and Register Pension Schemes service - AFT’ in the subject line of your email. We’ll reply and let you know how to file this information.
You can also contact us if you need to wind up a scheme that was registered using the Manage and Register Pension Schemes service. Please email email@example.com and put ‘Manage and Register Pension Schemes service – winding up’ in the subject line of your email.
As we continue to develop the service we’ll add new features and this will include pension scheme reporting in 2019. We’ll keep you updated through our pension schemes newsletters.
c. User research
We’re continuing to develop the Manage and Register Pension Schemes service and to help us with this we’d like to speak to:
- pension scheme practitioners who carry out administrative duties on behalf of pension scheme administrators
- scheme administrators who have used the Government Gateway to assign services to other people in your company
If you’re a pension scheme practitioner or scheme administrator and can help us with our user research on the development and design of the service, email us at firstname.lastname@example.org and put ‘Manage and Register Pension Schemes service – user research’ in the subject line of your email.
5. Reporting of non-taxable death benefits
Further to our message in Pension Schemes Newsletter 103, we can confirm that on 17 October 2018 we updated the Real Time Information (RTI) online service to prevent P6 coding notices being incorrectly issued to beneficiaries in receipt of death benefits that are entirely non-taxable. We are sorry for the time it’s taken to resolve this.
The following guidance supersedes any earlier guidance that we’ve given on how to report non-taxable death benefits.
You can now resume reporting non-taxable pension death benefit payments through RTI for 2018 to 2019 and you can find guidance on how to report these payments in part 2.2.7 of the 2018 to 2019: Employer further guide to PAYE and National Insurance contributions.
If you started reporting regular non-taxable death benefit payments to a beneficiary before we issued the guidance in Pension Schemes Newsletter 78, we already hold a start date on our record so you do not need to provide us with one for future payments under the same pension source.
If you started making regular non-taxable death benefit payments to a beneficiary after we issued the guidance in Pension Schemes Newsletter 78 and these payments have not been reported through RTI since, you should use 6 April 2018 as a start date when you first report a payment to this beneficiary.
RTI will link payments made to a beneficiary under the same payroll ID and start date, so that we can tell that this is a further payment under an existing pension source.
As these regular payments are entirely non-taxable you should always enter 0 in the ‘taxable pay to date in this employment’ field.
We know that it may take time for you to amend your processes to report these payments again, but we want to encourage you to start reporting these as soon as you’re able to.
6. Relief at source
a. Enrolling for Secure Data Exchange Service (SDES)
Further to our article in the Relief at source pension schemes newsletter - September 2018 we want to remind pension scheme administrators of relief at source pension schemes to complete their enrolment on the SDES by 30 November 2018.
As we explained in our Relief at source pension schemes newsletter - September 2018 it’s important that you complete all of the steps for SDES enrolment by 30 November 2018 (including sending HMRC a File Transfer Schedule of the annual return of information files that you intend to submit via SDES) otherwise we may not be able to send you a notification of residency status report in January 2019.
b. Clarifying the scope of the Welsh rates of Income Tax – technical note and draft legislation published for consultation
On 23 October 2018 we published the draft legislation needed to introduce separate rates of Income Tax in Wales for consultation. You can find the draft legislation and accompanying technical note on GOV.UK at Clarifying the scope of the Welsh rates of Income Tax – technical note and draft legislation - GOV.UK. You’ll also find details of how you can give us your feedback. The closing date for the consultation is 5 November 2018.
7. Non-statutory clearances
In Pension Schemes Newsletter 78 we explained how to contact HMRC regarding pensions and this includes how you can make a non-statutory clearance application.
We want to remind you that if you’re making a clearance application to HMRC, you must give us all the information relevant to your application and to help you with this you can find guidance and checklists in our GOV.UK guide Find out about the Non-Statutory Clearance Service.
You should only make a clearance application if your question relates to a specific scheme or transaction and you have read and considered the in-depth guidance on the pension tax rules in our Pensions Tax Manual. If you’ve read this guidance and are still not clear, you can apply to HMRC for a clearance
You must make sure that as part of your clearance application you detail why the rules are open to different possible interpretations, summarise the different interpretations and explain why the tax consequences are uncertain. You should specify the pages of our guidance (and parts of the pensions tax legislation) that are unclear.
We’ll only answer enquiries in cases of genuine uncertainty and where you’ve given all the information we require under the clearance service. If your clearance application does not meet the criteria or you’ve not given us the right information we will not give you clearance.
8. Applications to register a pension scheme
As we explained in Pension Schemes Newsletter 102, when you apply to register a pension scheme with HMRC we may ask you for more information about your application. We’ll write to you setting out the information that you need to give.
We want to remind pension scheme administrators to wait until you receive our letter and check the information that we’ve asked for, so that you send us the right information for each application. If you do not give the information that we’ve asked for, we’ll reject the application to register a pension scheme and you may have to submit your application again through the Manage and Register Pension Schemes service.
You can check on the Manage and Register Pension Schemes service to see if we’ve issued an information notice for one of your schemes. The status will show as ‘Pending info required’.
9. Transfers between registered pension schemes
As we explain in Transfer a pension scheme member’s savings, in cases where a member wants to transfer their pension savings to another registered pension scheme, the scheme administrators of the transferring scheme can ask HMRC for confirmation of a receiving scheme’s registration status.
We’ve seen an increase in the number of requests we receive from schemes administrators of transferring schemes to confirm the receiving scheme’s registration status.
We want to remind scheme administrators that you should only contact HMRC in cases of transfer if you have concerns about the receiving scheme’s registration status.
You should carry out your own checks when deciding whether or not to make a transfer and if you’re satisfied that the receiving scheme is a registered pension scheme you may make the transfer without contacting HMRC for confirmation of the registration status.
10. Reporting overseas transfer charges
If you’re reporting a transfer from a UK registered pension scheme to a qualifying recognised overseas pension scheme (QROPS), please make sure that you correctly report information relating to the overseas transfer charge.
We’ve noticed that some pension scheme administrators and practitioners are completing the APSS262 and the AFT return incorrectly when reporting the overseas transfer charge.
Some common problems with the information submitted include:
- reporting the wrong total amount of transfer on the AFT (you should use the gross total amount of transfer not the net amount)
- incorrectly reporting lifetime allowance charges as overseas transfers charges
- failing to submit an AFT (and pay the overseas transfer charge due) in cases of transfer where the APSS262 indicates that there’s an overseas transfer charge
- incorrectly selecting the reason that the overseas transfer charge is not due
Please check that the information that you submit on the APSS262 and on your AFT is correct and that you submit these on time. You must give the gross total amount of the transfer on both the AFT and the APSS262 and make sure that you include the amount of the overseas transfer charge (25% of the gross total amount of the transfer). You must also report and pay any tax due through the AFT return process.
Penalties are due where the AFT return is not filed on time. The amount of the penalty depends on the quarter period of the AFT return and when it is submitted.
You can find guidance on the information you must report to HMRC about transfers from registered pension schemes to QROPS in the Pensions Tax Manual at PTM103050.
You can also find more information about the AFT in the Pensions Tax Manual at PTM162100.
11. Master Trusts
As we explained in Pension Schemes Newsletter 103, from 1 October 2018 all new and existing Master Trusts must apply for authorisation from The Pensions Regulator.
Once a Master Trust is authorised, The Pensions Regulator will supervise the scheme to make sure it continues to meet its legal duties. Existing Master Trusts now have 6 months to apply for authorisation, while new Master Trusts must be authorised before they can operate in the market.
The Pension Regulator have published their Master Trust Authorisation Supervision and Enforcement Policy which has been updated following consultation.
The Master Trust Readiness Review: Lessons Learned document will also give you more information and help with your application for authorisation.
12. Operating PAYE on pension payments
In Pension Schemes Newsletter 103 we gave guidance on how to operate PAYE on pension payments.
We’d like to add to this guidance to explain that if the first quarterly payment for a new pension that you make using a cumulative tax code does not fall within the first quarter, you should use the tax tables for the quarter in which you make the payment.