Guidance

Pension schemes newsletter 134 — October 2021

Published 29 October 2021

1. Autumn Budget 2021

At the Autumn Budget on 27 October 2021, the government announced several measures in connection with pensions.

1.1. Pensions tax administration — responding to the Call for Evidence on the low-earners anomaly

Following the response to the Call for Evidence on pensions tax relief administration, the government announced a measure that will benefit pensions tax administration for low-earning individuals with a total taxable income below the personal allowance.

The government will introduce legislation in a future finance bill to make top-up payments directly to these individuals, saving in a pension scheme using a net pay arrangement. These top-ups will be payable on pension contributions from the 2024 to 2025 tax year onwards and will be made in arrears. These payments will help better align outcomes with equivalent individuals saving into pension schemes using relief at source. No changes will be made to how individuals save into pension schemes using net pay arrangements, with no change to take-home pay or pension contributions.

We’re currently developing and changing our systems and expect the first payments will be made towards the end of the 2025 to 2026 tax year.

We’ll keep you informed as systems are developed. We expect the impact on pension scheme administrators to be minimal as we’ll contact and pay eligible individuals directly, and communications issued will emphasise this.

The full response to the Call for Evidence can be found at Pensions tax relief administration: call for evidence.

1.2. Digitisation of relief at source

The government confirmed at Spending Review 2021, that it will invest to improve the administration of pensions tax reliefs. This includes work to digitise the current paper claims system for relief at source (RAS) to improve the process and reduce errors occurring for you, employers, your members and HMRC.

We’re committed to delivering a modern, data driven tax administration for relief at source. We’ll work closely with you to ensure that the changes deliver a digital solution to support the provision of information and declarations, provide quicker payments to relief at source schemes and help reduce errors. We’ll legislate in a future finance bill to provide the proper framework to achieve this.

If you’d like to talk to us about what you’d need from the service, or would like to join a working group, please email pensionsprogramme@hmrc.gov.uk and put ‘Digitising RAS’ in the subject line.

1.3 Scheme Pays reporting

As announced at Tax Policies and Consultation Day Spring 2021, the government will introduce legislation in Finance Bill 2021-22 to extend Scheme Pays reporting and payment deadlines in relation to annual allowance charges. This will apply when an individual asks their pension scheme to settle their annual allowance charge of £2,000 or more from a previous tax year, by reducing their future benefits.

We’ll provide further information on this in a future newsletter.

2. Extension to some of the temporary changes to pension processes as a result of coronavirus (COVID-19)

In Pension schemes newsletter 130 we told you that we were extending some of the temporary changes until 31 October 2021. These were to help scheme administrators during the coronavirus (COVID-19) pandemic.

We’ve reviewed these changes and are extending the following until 31 March 2022:

• APSS105 relief at source repayment claims
• APSS106 relief at source repayment claims
• APSS590 relief at source declaration
• submitting the APSS107 registered pension schemes annual statistical return without a signature

We’ll keep you updated on any further changes in future pension schemes newsletters.

3. Relief at source declaration — APSS590

We want to remind pension scheme administrators that the APSS590 annual return of information declaration forms part of your annual return of information. We’ll deem your return to be outstanding if you’ve not submitted your declarations, even if you’ve successfully submitted your 2020 to 2021 annual return of information via the Secure Data Exchange Service (SDES). We’d like to encourage scheme administrators to submit outstanding APSS590s as soon as possible.

As we’ve explained in Pension schemes newsletter 121, to help scheme administrators having difficulty obtaining wet signatures on APSS590 declarations from authorised signatories, HMRC will currently accept scanned APSS590 declarations:

• emailed by the authorised signatory — in this circumstance we will accept the claim without a signature
• signed and emailed by someone else providing we also receive a separate email directly from the authorised signatory authorising them to submit the claim

You should email these to reliefatsource.administration@hmrc.gov.uk and put ‘APSS590 — relief at source annual return declaration’ in the subject line of your email.

4. Pension scheme migration

Viewing a list of schemes

In Pension schemes newsletter 133, we announced the delay of the feature for scheme administrators to be able to view a list of pension schemes they need to migrate on to the Managing pension schemes service.

We can confirm that this feature will be available mid to late November. At this point, it will be a ‘read only’ list. Retirement annuity contracts and deferred annuity contracts will be shown in a separate list to your other pension schemes.

We’ll publish a Managing pension schemes newsletter on the day of release, with supporting GOV.UK guidance, but if you’d like us to contact you when we’ve confirmed the specific date this feature will be available, please email migration.mps@hmrc.gov.uk and put ‘Migration list of schemes date’ in the subject line.

In order to view a list of your pension schemes, you’ll need to enrol on the Managing Pension Schemes service if you have not already done so.

If you have multiple scheme administrator IDs and have not been in touch with us already, you’ll need to read about how to set your ‘master’ and ‘ancillary’ IDs and take the necessary action. You’ll need to do this to make sure that you can view all of your open pension schemes, retirement annuity contracts and deferred annuity contracts on the relevant lists.

De-enrolling from the Managing pension schemes service

We’ve noticed that some scheme administrators are enrolling on the Managing pension schemes service incorrectly. If you’ve enrolled incorrectly, you’ll need to wait 24 hours before you de-enrol, otherwise you’ll receive an error message.

If you need to re-enrol using the same administrator ID, we’ll need to work with you to do this. Please email migration.mps@hmrc.gov.uk and put ‘Incorrect enrolment’ in the subject line.

Migrating pension schemes

As we’ve mentioned in Managing pension schemes service newsletter — March 2021, in spring 2022 you’ll be able to select schemes from the list on the Managing pension schemes service and provide up to date information on them. Once this has been submitted, this will migrate the pension to the Managing pension schemes service. If you have ‘master’ and ‘ancillary’ IDs, the scheme will be migrated under your ‘master’ ID.

The pension scheme(s) will still exist on the Pension schemes online service.

We’ll provide further guidance on what information you’ll need to provide and which service you’ll need to use in future newsletters.

Migrating retirement annuity contracts and deferred annuity contracts

For these retirement annuity contracts and deferred annuity contracts, you’ll not be required to provide any additional information. To migrate them, you’ll only need to complete the required declarations.

If you have multiple retirement and or deferred annuity contracts, you’ll be able to migrate these altogether, by just completing one set of declarations.

We’ll provide further updates on migration in future newsletters.

5. Accessing your business tax account

Multi-factor authentication

We’ve introduced multi-factor authentication when accessing your business tax account to improve security across our services. You’ll be required to either provide a contact number or set up an authentication app when you sign in to your business tax account. You’ll receive an access code that you’ll need to enter before accessing any services. You’ll have the option of saving this code for 7 days, or you’ll be sent an access code every time you sign in.

If you do not receive your access code, you’ll have the option to request another.

If you’ve previously set up your multi-factor authentication preferences, these details will automatically apply. The access code will be sent to the contact number or authentication app you provided, when you sign in to your business tax account.

If your contact details change and you require your multi-factor authentication to be reset, please contact Pension Schemes Services.

Multiple users

If you’re a scheme administrator or practitioner with multiple users under one ID, you’ll need to set up different users and assign access to each to make sure there are no issues accessing your services. This means that each user will have their own set of credentials and can set their own multi-factor authentication to receive their access codes.

If you’re a scheme administrator or practitioner, you can assign access to services through your business tax account on the assign services page under ‘Manage Account’.

If you’re an ‘Admin’ user of a business tax account, you can reset the multi-factor authentication of any other users that use the same account under ‘Manage Account’. You can also reset user IDs and passwords for other users.

6. Pension flexibility statistics

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

From 1 July 2021 to 30 September 2021 we processed:

• P55: 8,640 forms
• P53Z: 3,393 forms
• P50Z: 1,292 forms

Total value repaid: £44,659,174

The tax repayment figures for the period 1 October 2021 to 31 December 2021 will be published in Pension schemes newsletter January 2022.

7. Registration statistics

For the period 6 April 2021 to 30 September 2021 HMRC received in total 792 applications to register new pension schemes. This is a 4% increase compared to applications received in the same period last year.

Of these applications, 64% have been registered and HMRC has currently refused registration for about 15% of applications. No decision has yet been made on the remainder.