Guidance

Pension schemes newsletter 122 – July 2020

Published 31 July 2020

1. Relief at source

a. Call for evidence: Pensions Tax Relief Administration

As you may be aware, the government has published a call for evidence on how to address the different outcomes for lower earners, depending on whether their pension schemes use the relief at source or net pay method of tax relief. The call for evidence seeks views from a wide range of stakeholders on how the two systems could be aligned.

Here’s a link to the Pensions tax relief administration: call for evidence.

The consultation closes at 11pm on 13 October 2020 and you can email your response to this call for evidence to Pensionstaxreliefadministrationcfe@hmtreasury.gov.uk.

b. Reporting excess relief

In Pension Schemes Newsletter 112 we explained that for the 2019 to 2020 and 2020 to 2021 tax years you can continue to report excess relief claimed through your next interim claim, whether or not an annual claim for the year has been submitted and that we’d provide further updates on this.

We’ve extended this so that you can continue to report excess relief in this way for the 2021 to 2022 tax year as well, whilst the government considers responses to the pensions tax relief administration call to evidence.

c. Annual return of information for the tax year 2019 to 2020

We want to remind pension scheme administrators that it’s important to use the right naming convention when submitting the annual return of information for 2019 to 2020. Using the wrong references on either the file name or within the annual return itself, means our systems will reject your submission and you’ll have to resubmit.

You can find details of how you should name your files in:

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

As you may know, the deadline for submitting your annual return of information and APSS590 declaration for 2019 to 2020 to HMRC has passed. However there are still returns outstanding from scheme administrators who’ve submitted interim repayment claims for 2020 to 2021. If a 2019 to 2020 annual return of information was due for your scheme and this is still outstanding, any subsequent interim repayments will be withheld until we receive both the outstanding return and APSS590 declaration.

2. Collective money purchase benefits

On 21 July 2020, as part of the consultation on the draft legislation published for Finance Bill 2020 to 2021, the government has provided draft legislation to change pensions tax rules to accommodate collective money purchase benefits (previously referred to as collective defined contribution schemes (CDCs). Collective money purchase benefits will be introduced by the Pension Schemes Bill currently going through Parliament.

We welcome your views on whether the changes to tax legislation in the published Finance Bill provide what is needed for collective money purchase benefits to operate within registered pension schemes. You should email: pensions.policy@hmrc.gov.uk.

This consultation closes on 15 September 2020.

3. Managing Pension Schemes service – accounting for tax return

On 21 July 2020 we added new features onto the Managing Pension Schemes service so for pension schemes registered using this service, that scheme administrators can:

• submit a compiled accounting for tax (AFT) return
• submit amendments to an earlier AFT return submitted using the service
• see the differences between versions of submitted AFT returns
• search their AFT returns for members

You can find more information about this and on how to request payment refunds or reallocations relating to AFT returns submitted through the Managing Pension Schemes service, in our GOV.UK guide Submit an Accounting for Tax (AFT) return using the Managing pensions schemes service and in the Managing pension schemes service newsletter – July 2020.

4. Guaranteed Minimum Pension (GMP) Equalisation Newsletter – July 2020

Earlier this month we published the Guaranteed Minimum Pension (GMP) equalisation newsletter – July 2020 with guidance on tax issues relating to the payment of lump sums as a result of GMP equalisation.

This guidance supplements existing guidance in the Pensions Tax Manual on benefit adjustments for registered pension schemes with periods of contracted out pensionable service between 17 May 1990 and 5 April 1997.

5. Pension flexibility statistics

The quarterly release of official statistics on flexible payments from pensions for the period 1 April 2020 to 30 June 2020 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 April 2020 to 30 June 2020 we processed:

Form number	Number of forms
P55	5,188 forms
P53Z	1,709 forms
P50Z	752 forms

Total value repaid: £27,227,935

Figures for the period 1 July 2020 to 30 September 2020 will be published in October 2020.

6. Annual allowance

a. Pension savings statements for tax year 2019 to 2020

This is to remind scheme administrators that by 6 October 2020 you must issue annual allowance pension savings statements for tax year 2019 to 2020 to your scheme members who made pension savings of more than the annual allowance to your pension scheme.

You can find more information about this requirement in the Pensions Tax Manual at PTM167100.

An annual allowance charge will be due where a member exceeds the annual allowance (or money purchase annual allowance) across all pension schemes and does not have sufficient unused annual allowance to carry forward from previous tax years.

b. Declaring the annual allowance charge on the Self Assessment tax return

Please remind those of your members who have exceeded the annual allowance for 2019 to 2020 and do not have sufficient unused annual allowance to carry forward to cover the excess, that it’s really important they declare this on their Self Assessment tax return. They must declare the total amount that they’ve exceeded their annual allowance by for 2019 to 2020 irrespective of who’s paying it.

Members must complete box 10 on page Ai4 of the supplementary SA101 Self Assessment additional information with the total amount that that they’ve exceeded their annual allowance (and this includes members who’ve exceeded their money purchase annual allowance).

If your pension scheme is paying some or all of their annual allowance charge, your member should:

• enter the amount you, as scheme administrator, are paying on their behalf at box 11 on page Ai4 of the SA101 - if they do not do this we’ll ask your member to pay that amount
• put the pension scheme tax reference number in box 12 on page Ai4 of the SA101

The deadline for your members to submit their Self Assessment return for 2019 to 2020 (and supplementary pages) is 31 January 2021.

Your members can find more information about the different types of annual allowance and carrying forward unused annual allowance in tax on your private pension contributions.

Your members can use our Pensions Annual Allowance Calculator to check whether they need to declare and pay an annual allowance tax charge, even if they have not received a pension savings statement.

There’s full guidance on how to fill in the SA101 in HS345 Pension savings - tax charges (2020).

7. Qualifying Recognised Overseas Pension Schemes (QROPS) transfer statistics

The annual release of official statistics on transfers to Qualifying Recognised Overseas Pension Schemes for the tax year 2019 to 2020 has now been published.

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