Guidance

Pension schemes newsletter 106 – January 2019

Published 30 January 2019

Pension flexibility statistics

The quarterly release of official statistics on flexible payments from pensions for the period 1 October 2018 to 31 December 2018 has now been published.

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

From 1 October 2018 to 31 December 2018 we processed:

• P55 = 7,770 forms
• P53Z = 4,537 form
• P50Z = 1,685 forms

Total value repaid: £30,242,426

Figures for the period 1 January 2019 to 31 March 2019 will be published in April 2019.

Lifetime allowance for 2019 to 2020

The Finance Act 2004 (Standard Lifetime Allowance) Regulations 2019 were made on 10 January 2019 and come into force on 6 April 2019. As announced at Budget 2018, the lifetime allowance will increase to £1,055,000 for the year 2019 to 2020.

Reporting non-taxable death benefits

We’ve received some questions from pension scheme administrators about using a starting date for reporting death benefits that are entirely non-taxable. As a result we’ve revisited the Real Time Information Technical specifications, 2018 to 2019 CWG2 and Pension Schemes Newsletters and found that the guidance we gave you in the newsletter was wrong.

We are sorry that the guidance that we gave you in Pension Schemes Newsletter 104 was incorrect. Thank you to scheme administrators for bringing this to our attention.

Scheme administrators who followed our guidance and tried to report a starting date for these payments will have received an error message.

We now know that this is because when reporting death benefits that are entirely non-taxable, the starting date field should be blank when the scheme administrator submits their FPS. For these payments the annual amount should be zero.

This applies to both lump sum death benefits and regular death benefit pension payments that are entirely non-taxable.

We are sorry for any confusion or inconvenience caused regarding the reporting of these payments in line with our previous guidance.

If scheme administrators have received an error message when reporting non-taxable death benefits we’d ask the scheme administrator to try to report this payment again but this time leave the starting date field blank at the point of submission.

As we’ve previously explained, we know that it may take time for scheme administrators to amend their processes to begin to report these payments again.

If you have any questions, or have any ongoing issues in reporting these non-taxable pension death benefit payments please email pensions.businessdelivery@hmrc.gsi.gov.uk and put ‘reporting non-taxable death benefits’ in the subject line of your email.

Changes to HMRC email addresses

Over the next few months we’ll be making a change to our email addresses in HMRC. Soon you may notice that instead of our email addresses ending in @hmrc.gsi.gov.uk, they’ll end @hmrc.gov.uk. For a while, when we make this change any emails that you send to our old email addresses will redirect to us. We’ll keep you updated when our email addresses change so that you can update your records with our new addresses.

Guaranteed Minimum Pension (GMP)

Following the recent High Court of Justice ruling (Lloyds Banking Group Pensions Trust Limited: HC-2017-001399) there is increased interest in the equalisation of GMP benefits arising in respect of contracted-out schemes. We’re considering the pension tax issues arising and we’ll give more information and advice on this through our pension schemes newsletters in the coming months.

Relief at source – January 2019 notification of residency status reports

You should have now received your January 2019 notification of residency status reports. We’ve contacted all pension scheme administrators of relief at source schemes who had not downloaded their report to remind them to do this.

If you requested that we re-present your report

If you asked us to re-present your January 2019 notification of residency status report, when we make the file available to you, you’ll have the same time limits for downloading it apply. You’ll have 6 days (144 hours starting from when we made the report available to you) to download your file.

You’ll get an email and a reminder when your file is available for you to download and you can also log in to the Secure Data Exchange Service (SDES) to check if your report is available to download.

You can find more information about the January 2019 notification of residency status reports in Relief at source pension schemes newsletter – January 2019.

If you were unable to receive your report

We identified several scheme administrators who could not receive their notification of residency status report because they had not completed SDES enrolment.

So that you can receive your report in January 2020, you need to make sure that you’ve completed your SDES enrolment. For 2019 to 2020 you can use our service to look up the residency status of your members or default to rest of UK.

Relief at source – annual return of information declaration

In the Relief at source pension schemes newsletter – September 2018 we explained that for your annual return of information for 2018 to 2019 and later tax years you must submit a declaration.

We have published the draft declaration form as Appendix 1 of this newsletter.

This declaration will be an iform so you’ll have to fill it in onscreen and as you work through the declaration only the relevant questions will be displayed once you’ve selected the answers that apply to you. However so that you can see the information that we are asking for we’ve published this in draft as a PDF. The draft PDF includes duplicate questions, however these will only appear once when you complete the finalised form onscreen.

When you complete your 2018 to 2019 annual return of information this declaration will form part of your return but you’ll be unable to submit this declaration through SDES with the rest of your return. Instead you’ll should fill this in onscreen and send this to us. You can email this to reliefatsource.administration@hmrc.gsi.gov.uk and put annual return of information – declaration in the subject line of your email.

We’ll update you through the pension scheme newsletter when we’ve published the form for you to use.

Change of name for the Manage and Register Pension Schemes service

We’ve changed the name of this service to Managing Pension Schemes because we think this reflects more accurately what you use the service for. We’ve updated our GOV.UK content with the new name and are working to update our Pensions Tax Manual. Changing the name of this service will not affect what you use the service for, how you use the service or your access to the service.

We’ll continue to keep you updated as we design, develop and launch new features on the Managing Pension Schemes service through our pension schemes newsletters.

Master Trusts

Application window closes 31 March 2019

If you’re responsible for a Master Trust and you want your scheme to continue as a Master Trust, the scheme trustees must apply to The Pensions Regulator (TPR) for authorisation before the application window closes on 31 March 2019.

Master Trusts must meet certain criteria so that they can continue to operate. They must give evidence demonstrating that:

• the people running the schemes are fit and proper
• the Master Trust has good systems and processes
• a continuity strategy is in place setting out what will happen in case of any problems
• any funder behind the scheme meets certain requirements
• the scheme is financially sustainable

You can find out more about the authorisation process on TPR’s website.

If you’re a Master Trust and do not apply for authorisation

If you’re responsible for a Master Trust and you have not applied for authorisation or exited the market, after 31 March 2019 by law your scheme will have to cease and wind up and TPR may also impose financial penalties.

A Master Trust operating without authorisation is one of the grounds for HMRC to de-register a scheme. However we would not do this automatically. HMRC has discretionary powers to de-register a pension scheme so we would consider the impacts of de-registration on the employers and scheme members and the facts of each specific case.