Guidance

Pension schemes newsletter 126 – December 2020

Published 3 December 2020

1. Managing Pension Schemes

1.1 Multiple scheme administrator IDs

In Pension Schemes Newsletter 123, we explained that scheme administrators and practitioners will need to move their schemes under one administrator or practitioner ID on the Pension Schemes Online service, ahead of migration to the Managing Pension Schemes service. This is because scheme administrators and practitioners will only be able to hold one administrator or practitioner ID for each Corporation Tax Unique Taxpayer Reference (UTR). If you’re both a scheme administrator and practitioner, you’ll be able to hold an ID for each, under one Corporation Tax UTR.

We’re looking at options for migrating schemes to the Managing Pension Schemes service and we’ll update you on this as soon as possible. We’re still encouraging scheme administrators and practitioners with multiple IDs to consider which ID they’ll use on the Managing Pension Schemes service. However, if you’ve not already taken action to move your schemes under one ID, you should wait until we give more information, as we may be able to help make the process easier.

In the meantime, we can help you check:

• your scheme administrator IDs
• the schemes for which you’re the administrator

You must send us a separate request for each of these.

For a list of your scheme administrator or practitioner IDs, you must give your:

• scheme administrator or practitioner name
• scheme administrator or practitioner address, including postcode
• contact telephone number
• email address

Email pensions.businessdelivery@hmrc.gov.uk with this information, using: ‘List of my scheme administrator IDs’ or ‘List of my practitioner IDs’ in the subject line.

For a list of registered pension schemes attached to your scheme administrator or practitioner ID, you must give your:

• scheme administrator or practitioner name
• scheme administrator or practitioner ID
• contact telephone number
• email address

Email pensions.businessdelivery@hmrc.gov.uk with this information, using: ‘List of my registered pension schemes’ in the subject line.

We’ll validate the information you give and may ask you for more information before we provide any scheme, scheme administrator or practitioner details.

1.2 User research

Thank you to the scheme administrators and practitioners that have helped us with our user research for the Managing Pension Schemes service. As a result of your feedback, we’ve developed new features to:

• help you to find the service
• tell you what you’ll need to register as a scheme administrator
• tell you what you’ll need to apply to register a new pension scheme
• check your scheme charges and any penalties for your Accounting for Tax return

We still need your help to test these new features. If you can help us, email pensions.administration@hmrc.gov.uk, using ‘user research’ in the subject line.

This is your chance to give feedback and to help inform the future design and development of the service.

2. Relief at Source

2.1 Notification of residency status report for 2021 to 2022

As explained in Pension Schemes Newsletter 123, scheme administrators of a relief at source pension scheme should have successfully submitted their annual return of information for 2019 to 2020, by 30 September 2020. This was to make sure we provided your notification of residency status report in January 2021.

The deadline has now passed, so we’ll not be able to provide you with a residency report for January 2021 if you’ve not submitted your annual return of information. However, it’s still important that you successfully submit your 2019 to 2020 return as soon as possible, otherwise we may stop your subsequent interim repayments.

2.2 Receiving your notification of residency status report

In January 2021, we’ll tell you the residency tax status of your scheme members, so that you can apply the correct rate of relief at source to your scheme members in the tax year 2021 to 2022.

From mid-January 2021, you’ll be able to download your notification of residency status report from the Secure Data Exchange Service (SDES) and your report will be based on data from your 2019 to 2020 annual return of information. We’ll send you an email when we start to release the notification of residency status reports. If you want to be added to our mailing list email reliefatsource.administration@hmrc.gsi.gov.uk, using ‘Relief at source – mailing list’ in the subject line.

You’ll also receive an email through SDES when your file is available for you to download. You’ll have 6 days to download this (144 hours), starting from when we make the file available to you.

You should check that your email address is up to date on SDES and if not, you should update this to avoid delay in accessing your report. If you’re expecting an email from us but do not think you’ve received one, check your junk folder in your email account.

Email Support.SDES@hmrc.gov.uk if you:

• cannot open your report because the file is corrupt
• do not download your report in time

Email reliefatsource.administration@hmrc.gsi.gov.uk and put ‘Relief at source – January 2021 residency report’ in the subject line, if you:

• do not receive your report by the end of January 2021 and you submitted your annual return of information for the previous tax year
• have questions about the data contained within your report

2.3 If you do not receive a notification of residency status report

If you do not receive a residency report in January 2021, you can check your members’ residency status for relief at source by using our look up service. You can check the residency tax status for single or multiple members, or default to the UK basic rate for your members.

If you do not have a residency status for a member by the time you claim relief at source on their first contribution in a tax year, you must treat them as having a ‘rest of UK’ residency status. You must not apply a tax rate based on the member’s address.

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.

2.4 APSS106 updates

We’re adding new boxes to the APSS106, the Registered Pension Schemes Relief at Source annual claim, for annual claim periods 2018 to 2019 and onwards, to bring this is line with the APSS105. This means you’ll be able to record the total number of members included in the claim, as well as the number of members included in the claim who are:

• UK taxpayers
• Scottish taxpayers
• Welsh taxpayers

You can find the latest version of the APSS106 on GOV.UK

3. Pension scheme returns for 2019 to 2020

As explained in Pension Schemes Newsletter 119, to help scheme administrators who are experiencing difficulties in getting the valuations needed for pension scheme returns, as a result of the COVID-19 pandemic, we have not and will not be issuing any notices to file pension schemes returns for 2019 to 2020.

4. Signing in to online services

In Pension Schemes Newsletter 125, we referred to an ongoing programme of deleting the Government Gateway credentials (user ID and password) of users who’ve not signed in to a tax service through their Business Tax Account for 3 years.

As we explained, this will not affect the scheme administrator and practitioner records that we hold, on either the Managing Pension Schemes service or the Pension Schemes Online service. However, without action, scheme administrators and practitioners will be unable to access their scheme or their scheme Administrator or Practitioner records on these pensions tax services.

We’ve now published guidance on how scheme administrators can recover deleted Government Gateway credentials in Part 1 of the Pension Schemes Online User Guide. However, this is not a quick process so, we continue to encourage scheme administrators to log into their Business Tax Account as soon as possible. This will avoid having their Government Gateway credentials deleted and allow them to continue accessing our pensions tax services.

Scheme administrators and practitioners who’ve lost their log-in details can reset them by selecting this option from the Government Gateway Account log-in page.

5. In-specie contributions

We’re clarifying HMRC’s position following the decision of the Upper Tribunal (UT) in HMRC v Sippchoice Limited [2020] UKUT 0149 (TCC), a long running ‘in-specie’ contribution case.

The decision confirmed HMRC’s view that tax relief is not available in respect of contributions made by in-specie transfer (except as provided in section 195 Finance Act 2004) and provided clarification that the expression ‘contributions paid’ in section 188(1) of Finance Act 2004 (section 188(1)) does not include settlement by transfer of non-monetary assets, even if the transfer is made in satisfaction of an earlier obligation to contribute money.

Notwithstanding this important clarification of the legal scope of section 188(1), we’re aware that the UT’s interpretation of guidance in HMRC’s Pensions Tax Manual (PTM) has created some uncertainty. In particular, whilst acknowledging the guidance was not directly relevant to its construction of section 188(1), the UT interpreted the section “Giving effect to cash contributions” at PTM042100 in a way that was contrary to its intended meaning.

The paragraphs in the “Giving effect to cash contributions” section of the PTM guidance were intended to be read together rather than in isolation. They describe a situation where the pension scheme trustees agree to purchase an asset from a person who has a separate obligation to make a monetary pension contribution, and the payment of the pension contribution is then effected pursuant to a contractual offset agreement. The guidance acknowledges that, in certain circumstances, it’s possible for the offset agreement to give effect to the pension contribution as a monetary contribution.

In light of the UT’s comments, we’ve clarified the “Giving effect to cash contributions” guidance at PTM042100 to try to help customers better understand HMRC’s long-standing approach to pension contributions made pursuant to a contractual offset agreement. This is a clarification and HMRC’s position remains unchanged. We’ve also amended the guidance at PTM043310 regarding asset-backed contribution arrangements.

Following the UT decision, we’re continuing to review in-specie cases and consider what it means for those who’ve already claimed and received relief. Any contribution that has been paid pursuant to an effective contractual offset agreement in the circumstances described at PTM042100 or where HMRC clearance has been obtained in relation to an asset-backed contribution arrangement (and the information provided remains accurate and complete), will be unaffected.

6. Annual allowance – members declaring their annual allowance charge on their Self Assessment tax return

We’d like to ask scheme administrators to remind your members who’ve exceeded their annual allowance for 2019 to 2020, and who do not have sufficient unused annual allowance to carry forward to cover the excess, to declare this on their Self Assessment tax return - even if your scheme is paying the tax charge.

The Pension savings - tax charges (Self Assessment helpsheet HS345) has specific information on declaring the annual allowance charge on Self Assessment returns.

Your members can also find information and guidance about annual allowance, carrying forward unused annual allowance and paying and declaring the annual allowance charge on GOV.UK. They can use our (pension annual allowance calculator](https://www.tax.service.gov.uk/pension-annual-allowance-calculator).