Guidance

Pension schemes newsletter 79 - June 2016

Updated 30 June 2016

1. Pension flexibility

a. Pension flexibility payments: operating PAYE correctly

In Pension schemes newsletter 67 HM Revenue and Customs (HMRC) provided guidance on operating PAYE on pension flexibility payments.

We are aware that when making pension flexibility payments, some pension scheme administrators are still treating these as annual payments and calculating PAYE on a month 12 basis instead of week 1/month 1 basis.

Flexibly accessed payments are not annual payments. You should tax these payments using either the emergency code on a week 1/month 1 basis or, where you have a current year P45; using that code on a week 1/month 1 basis.

In cases where the fund has not been extinguished, we will then issue a tax code to operate against future payments.

This applies to pension flexibility payments from 6 April 2016 onwards.

b. Data items 168, 171, 173 and 174

HMRC are still receiving Real Time Information (RTI) submissions from pension scheme administrators and providers who are not using data items 168, 171, 173 and 174 to report pension flexibility payments and pension death benefit payments. This is a reminder that these data items are mandatory if you have made these types of payments.

If you don’t complete the appropriate data items on your RTI full payment submission, this will have an impact on your customers who may contact HMRC to reclaim a repayment of overpaid tax. This is because our records will not show that a payment has been made and will not reflect that any tax is due back to the customer.

2. Annual allowance

a. Pensions Tax manual update

HMRC have recently updated the Pensions Tax manual to include guidance on the modified reporting requirements arising from the introduction of the annual allowance taper and clarifying the conditions for ‘Scheme Pays’.

b. Annual allowance user research

In Pension schemes newsletter 77 HMRC explained that we are developing a new single calculator to incorporate all the recent changes to the annual allowance and asked for volunteers to help with our user research. Thank you to everyone who completed the annual allowance survey online and provided additional feedback. Our work on developing the calculator continues and we will provide updates on this in due course.

c. Scheme Pays – amending the 2014 to 2015 Self Assessment tax return

This is a reminder that if your members use the ‘Scheme Pays’ option to pay their annual allowance tax charge, they need to declare the annual allowance tax charge on their self-assessment tax return and complete the box to indicate that the scheme has paid. Any scheme member who hasn’t done this will need to amend their Self Assessment tax return.

Please remind your members that for amendments to the 2014 to 2015 tax return, the deadline is 31 January 2017.

d. Event report – reportable events 22 and 23

HMRC are aware of an error on the online event report for ‘Annual Allowance Pension Savings Statement Information - Member and Aggregate Pension Input Amount Details’.

The event report currently asks for details of the aggregate pension input amounts for each member (reportable event 22) and then asks if you have provided the member with a pension savings statement under regulation 14A(1A) SI2006/567 (reportable event 23).

This legislative reference is incorrect and should read ‘Have you provided this member with a pension savings statement under regulation 14A(1)(b)(ii) SI 2006/567?’. Such a pension savings statement relates to the money purchase annual allowance.

Although the incorrect legislative reference suggests otherwise please note that the event report has not been updated specifically for the transitional annual allowance rules for 2015 to 2016, however you will still be able to report details of the aggregate pension input amounts for 2015 to 2016 as reportable event 22.

That is where a pension savings statement is required because the individual is a member of the pension scheme for a pension input period that ends during 2015 to 2016 and:

• the aggregate of the individual’s pension input amounts exceeds £80,000 for 2015 to 2016, or
• the aggregate of the individual’s pension input amounts exceeds £40,000 for the post-alignment tax year

There is no change to the requirements for making reportable event 23 relating to 2015 to 2016.

3. Change of scheme details

In June 2016, HMRC archived the APSS152. So if you need to amend the establisher name for a scheme that has a status of open, or if you wish to amend the scheme name you’ll need to notify HMRC in writing at:

Pension Schemes Services
Ferrers House
Castle Meadow Road
Nottingham
NG2 1BB

You’ll need to include the:

• Pension Scheme Tax Reference of scheme you want to make changes to
• current name of scheme or establisher
• new name of scheme or establisher
• reason for change
• contact name, address and telephone number
• copy of new/amended trust deed

4. Lifetime allowance

a. Lifetime allowance online service

In Pension schemes newsletter 77 HMRC explained that the online service for scheme members to apply for protection from the lifetime allowance tax charge will be available from the end of July 2016. The online service will also allow pension scheme members to view a history of their previous lifetime allowance protection details.

If your members want to apply for lifetime allowance protection from the end of July 2016, or to view details of their protections they will need a HMRC Online Services Account. To create an account, or to login to an existing one, they should go to HMRC services: sign in or register

Your members can find more information about the lifetime allowance and protections on GOV.UK.

Members who are not planning to take benefits before August 2016 should wait and apply for protection using the online digital service from the end of July 2016.

b. Lifetime allowance user research

In Pension schemes newsletter 78 HMRC asked for feedback on the new pension lifetime allowance online service and provided links to 2 surveys, one for pension scheme administrators and one for scheme members.

Thank you to everyone who completed these lifetime allowance online surveys. If you haven’t completed the survey but would like to, you still have time.

Here is a link to the short survey for pension scheme administrators.

Here is a link to the short survey for pension scheme members.

This is your opportunity to let HMRC know what your needs are as users of our new pension lifetime allowance online services. Your feedback will help us to build the best possible service.

5. Pension Schemes Services contact phone number

HMRC are aware that a number of our pension letters have the wrong telephone number on them. The Telephone number: 0845 600 2622 is our old Pension Schemes Helpline number. We are currently working to update our letters with the current helpline number.

The correct telephone number for the Pension Schemes Helpline is Telephone: 0300 123 1079.

We are sorry for any inconvenience caused.

6. Pension scheme transfers

In Pension Schemes Newsletter 60 HMRC explained that scheme administrators of transferring schemes can submit requests for HMRC to confirm the registration status of a receiving scheme by email to pensionschemes@hmrc.gov.uk.

We explained that if you are sending these requests to us by email, you must include a scanned copy of a letter requesting confirmation of the registration status of a scheme that you have been asked to make a transfer to, including all the relevant scheme details.

We have received a number of requests that aren’t accompanied by a scanned letter or where the scanned letter is not on headed notepaper. Please note that we are unable to process email requests that do not include a scanned copy of the letter on headed paper.

7. Finance Bill 2016 – Royal Assent expected later than usual

In recent years the Finance Bill has received Royal Assent in the July after its publication. As the Public Bill Committee consideration of the Finance Bill 2016 is only due to conclude on 14 July 2016, Royal Assent will be later this year. HMRC currently don’t have a timetable for when Royal Assent will be, however we will provide more information when this is announced.

8. Relief at source – information notices

You’ll be aware that as part of HMRC’s ongoing monitoring process to protect the tax relief that we repay each year, we routinely issue information notices requesting further information on some APSS105 interim relief at source repayment claims. The Registered Pension Schemes (Relief at Source) Regulations 2005, SI 2005/3448 give HMRC discretion over the amount we repay on an interim repayment claim and allow us to request information to satisfy ourselves about the amount reclaimed.

In the information notice, we explain that we need this information to satisfy the validity of the interim repayment claim and that until we have received and reviewed this information, the repayment relating to that claim will be stopped.

Providing that you send us the information requested on the information notice, future interim repayment claims will be unaffected unless included in a future sample check. We will issue you with a further information notice if this is the case.

The information notice explains that you cannot appeal against the information notice or the decision not to repay the amount on the interim repayment claim but has contact details in case you wish to discuss further.