1. Pension flexibility statistics
The quarterly release of official statistics on flexible payments from pensions was published on 25 January 2017. HM Revenue and Customs (HMRC) can now provide more information on the number of tax repayment claim forms (P55s, P53Zs and P50Zs) processed in respect of pension flexibility payments.
From 1 October 2016 to 31 December 2016 we processed:
- P55 = 3,654 forms
- P53Z = 4,269 forms
- P50Z = 1,161 forms
Total value repaid is £22,891,268
Figures for the period 1 January 2017 to 31 March 2017 will be published in April 2017.
2. Lump sum death benefits - information requirements
Legislation has now been introduced making changes to the Registered Pension Schemes (Provision of Information) Regulations 2006.
You can find the Registered Pension Schemes (Provision of Information) Regulations 2006 on the legislation.gov.uk website.
When a taxable lump sum death benefit is paid to a trust, these regulations require scheme administrators to provide information to the trustee on the amount of lump sum death benefit and tax paid by the scheme administrator. The regulations also require trustees to pass on the information if the trustees then use the lump sum death benefit to make a payment to an individual beneficiary of the trust. This makes sure the trust beneficiary has the information they need in order to claim a refund of the excess tax paid by the scheme administrator over and above the tax at their marginal rate.
Thank you to those industry representatives who responded to the recent technical consultation. HMRC will update the Pensions Tax Manual shortly to include these requirements.
We’re also developing 2 new forms to help scheme administrators and trusts provide the information required in these regulations and will provide an update on these in due course.
3. Annual allowance calculator update
In pension schemes newsletter 81 HMRC launched a beta version of the annual allowance calculator and asked for feedback. Thank you to everyone who provided feedback on this.
The calculator is live and no longer a beta version, however we’re continuing to review and update the calculator and your feedback is still important to us.
You can provide feedback to us using the feedback option directly on the GOV.UK pages or by emailing us at email@example.com and put ‘Annual allowance calculator’ in the subject line of your email.
4. Qualifying recognised overseas pension schemes (QROPS) Online
This is a reminder that in pension schemes newsletter 83 HMRC explained that from April 2017 QROPS Online will no longer be accessible. Changes to QROPS forms in recent years mean that the system no longer captures the correct information so we’re closing QROPS Online.
Pension scheme administrators, managers and members of overseas schemes can find more information about the pension tax rules on overseas pension schemes, including the latest version of the forms to report information we require, on the overseas pension schemes pages.
5. Drawdown pension tables
HMRC published extended drawdown pension tables on 18 January 2017. The factors haven’t changed for yields 2% and above, but as gilt yields have been below 2% for some months, we’ve extended the 2011 tables to cover gilt yields in the range of 0% to 2%. We’ve also taken the opportunity to tidy up the tables and there are now only 2 tables, one for adults (rather than one for males and one for females) and one for those under 23.
Please note that the extended tables apply from 1 July 2017 rather than 6 April 2017 as previously announced to give you more time to update your systems. You should use the extended tables for all calculations that you do on or after that date.
With the publication of the extended tables, the minimum level of 2% referred to in pension schemes newsletter 51 no longer applies from 1 July 2017. From that date, you should use the extended tables where the UK gilt level is between 0% and 2%. If the gilt level falls below 0% then you should calculate the basis amount using the gilt yield figure of 0%.
For pension drawdown calculations up to and including 30 June 2017 you should continue to use the drawdown tables for calculations up to 30 June 2017 and drawdown tables for calculations up to 30 June 2017 – instructions.
If you have any questions about the extended drawdown tables email firstname.lastname@example.org and put ‘drawdown pension tables’ in the subject line of your email.
6. Relief at Source
6.1 Relief at Source - annual returns of individual information for 2015 to 2016
In January 2016 HMRC issued notices requiring pension schemes operating Relief at Source to submit their annual return of individual information for tax year 2015 to 2016 (also known as the RPSCOM100(Z)) to HMRC by 5 October 2016.
The deadline for submitting the 2015 to 2016 returns has passed but there are still a number outstanding.
In pension schemes newsletter 82 and pension schemes newsletter 83 we reminded scheme administrators that failure to submit this information by the deadline will hold up any subsequent interim repayments pending receipt of the outstanding information. Where a submission is made but fails processing, we still deem this to be outstanding and will stop any subsequent interim repayment claims pending successful re-submission.
If failure occurs on the third submission we’ll stop all future interim repayments until a further re-submission is received and is deemed successful.
Since October 2014 we’ve stopped a number of interim repayment claims for non-submission or submission failure, and where possible we have worked closely with pension scheme administrators to help them meet their obligations.
If you’re a pension scheme administrator operating a Relief at Source pension scheme but have yet to receive a notice requiring you to submit this information for 2015 to 2016, email email@example.com and put ‘Relief at Source’ in the subject line of your email.
You can find more information on Relief at Source repayments and the member information we need relating to Relief at Source in pension administrators: Relief at Source annual information returns.
6.2 Change of filing deadline for annual return of individual information for 2016 to 2017
In pension schemes newsletter 75 HMRC explained that the filing deadline for the annual return is being brought forward from October to July each year, and we’ve changed the date that we issue notices to provide this information to January, in preparation for the introduction of the July filing deadline.
Information notices for the 2016 to 2017 annual return of individual information will be sent out by the end of January 2017, and for the 2016 to 2017 tax year the filing deadline for the annual return is 5 July 2017.
If you’re a pension scheme administrator operating Relief at Source and you’ve not received a notice by the end of February 2017, email firstname.lastname@example.org and put ‘Relief at Source’ in the subject line of your email.
6.3 Completion of the annual return of individual information
HMRC received a number of queries about the information required for completion and submission of the annual return of individual information. We can confirm that all of the information on the information notice is required and used for National Statistics purposes.
We’ve also been asked about providing the fund value on the annual return of individual information and the twelve month window for providing this. As part of the annual return of individual information, scheme administrators have to provide the total value of sums and assets held for the member under the scheme, on a particular date determined by the scheme, within a twelve month period.
From 2017 to 2018 the twelve month period will start from 6 July each year, so for fund valuations for the 2017 to 2018 tax year the twelve month window will start on 6 July 2017.
Scheme administrators can decide what date to carry out the fund valuation within the twelve month period and you can continue to carry out your valuations on the date you currently use. However given the change to the start of the twelve month period (switching from October to July), if you feel that the revised deadline creates difficulties on using the date you previously chose, you can select another, more appropriate date that gives you time to carry out the valuation in line with the pension tax rules.
Guidance on GOV.UK has more information about completing the annual return of individual information.
7. Lifetime allowance
7.1 Deadline for applying for individual protection 2014 (IP2014)
As you may know, the deadline for applying for IP2014 is 5 April 2017. Please remind your members that if they want to protect their pension savings using IP2014 then HMRC must have received their application no later than 5 April 2017.
Members who want to apply for IP2014 protection must do this through the lifetime allowance online service, accessed through the guide pension schemes: protect your lifetime allowance.
To apply, members will need an 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.
Although the deadline for IP2014 applications closes at midnight on 5 April 2017, individuals will still be able to log on and amend an existing application after this date.
7.2 Lifetime allowance pension scheme administrator look up service
Following the article in pension schemes newsletter 81 about development of the look up service for pension scheme administrators to check the protection status of their members, HMRC received a number of queries about the service and the date it’ll go live. We’re sorry for the delay to delivery of this service. We can confirm that we’re continuing to develop the pension scheme administrator look up service and will keep you updated on progress.