Guidance

Pension schemes newsletter 98 - May 2018

Published 3 May 2018

1. Manage and Register Pension Schemes service

In the Manage and Register Pension Schemes service newsletter we explained that we’d release the first features on the Manage and Register Pension Schemes service from 8 May 2018.

The launch of the Manage and Register Pension Schemes has been delayed by a few weeks. This delay is because the full development and testing of the service is slightly behind our planned delivery date.

We are sorry for any inconvenience this causes you.

We will release the service on 4 June 2018 and we’ll launch this in a bespoke newsletter to provide you with full details of the features available on the service and where you can find supporting guidance.

As a result of this delay, where we said that the current Pension Schemes Online service would not be available from Friday 4 May 2018, this will now continue to be available until 6pm on Friday 1 June 2018.

2. Pension flexibility statistics

The quarterly release of official statistics on flexible payments from pensions for the period 1 January 2018 to 31 March 2018 has been published recently.

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

From 1 January 2018 to 31 March 2018 we processed:

• P55 = 6,218 forms
• P53Z = 3,448 forms
• P50Z = 988 forms

Total value repaid = £22,514,839

Figures for the period 1 April 2018 to 30 June 2018 will be published in July 2018.

3. Registration statistics

For 2017 to 2018 HMRC received in total 2,486 applications to register new pension schemes. This is a 36% reduction compared to applications received in 2016 to 2017.

Of these schemes, 66% have been registered and HMRC has currently refused registration for about 14% of applications. No decision has yet been made on the remainder.

Since 2012 to 2013 HMRC has seen an 84% decrease overall in the number of applications to register pension schemes.

4. Annual allowance calculator

As you may be aware, the annual allowance calculator is currently unavailable.

We’ve updated our GOV.UK guides to remove the link to the calculator and we’re currently working to get this back online. We’ll keep you updated on this in future newsletter and will restore the link to the calculator once it’s available again.

We’ve also updated the Send pension scheme reports to amend the details to be reported for events 22 and 23.

5. Lifetime allowance additional member functionality

In Pension Schemes Newsletter 88 we explained that we’re working to include an additional member function for the lifetime allowance online service so that members can tell us online if they have lost or withdrawn their lifetime allowance protection.

We’re continuing our work and hope that this functionality will be available in the next couple of months. We’ll provide further updates on our progress with this in future pension schemes newsletters.

6. Relief at source for Scottish Income Tax

a. Submitting your 2017 to 2018 annual return of individual information – file name

If you’re completing the HMRC registered pension scheme relief at source spreadsheet for 2017 to 2018, please make sure you change the file name following the format of the original file name, before you send it to us.

You must change the file name to show:

• your own P reference
• the correct sub reference
• the batch number
• the total number of batches
• the tax year

For example: P0000_01_001_001_2018

Your annual return of individual information should reach us no later than 5 July following the end of the tax year. If it’s outstanding after that date we won’t process any future interim claims until your return is successfully submitted.

b. Look up the residency status of new members for relief at source

As we explained in Pension Schemes Newsletter 96, please contact us if you’d like access to the look up residency status service so that you can check the residency status of new members that join your pension scheme.

Please email pensions.businessdelivery@hmrc.gsi.gov.uk with:

• your name
• your company name
• your email address
• an estimate of the number of members joining your scheme(s) in 2017 to 2018 (optional)

and put ‘Residency status look up service – private beta’ in the subject line of your email.

c. Application programming interface (API) testing and controlled access

As we explained in the Pension Schemes Relief at source for Scottish rate of Income Tax – newsletter, as well as providing access to the service through GOV.UK, we’re working on an API so that you can develop your own software to access the information held on the service.

We’re now testing our API with developers, and we’ll keep you updated on progress through future newsletters.

Access to the API is not fully available on GOV.UK but if you’d like access to the API external text environment please email pensions.businessdelivery@hmrc.gsi.gov.uk with:

• your name
• your company name
• your email address
• an estimate of the number of members joining your scheme(s) in 2017 to 2018 (optional)

and put ‘Look up residency status for relief at source – access to API’ in the subject line of your email.

d. Accessibility and assisted digital user research

We’re still carrying out user research to help us make sure the service is accessible to all scheme administrators.

If you’re a pension scheme administrator who uses assistive technologies such as an enlarged text or screen readers, or if you need additional support to use our online services, we’d like talk to you.

If you can help us with this user research please send an email with ‘Residency status look up service – user research’ in the subject line to pensions.businessdelivery@hmrc.gsi.gov.uk.

7. Pension flexibility payments and Scottish Income Tax

As we explained in Pension Schemes Newsletter 96 the normal PAYE rules continue to apply to these payments.

If the member takes a payment from the pension scheme that doesn’t use up the pension pot, the first payment will be treated as an ongoing PAYE source.

If the recipient has a P45 dated on or after 6 April in the current tax year, you should operate the code on the P45 on a Week 1/Month 1 basis. If the code shows that the recipient is a Scottish taxpayer, the Scottish Income Tax rates will apply.

If you already make payments to the recipient, the additional pension flexibility payment should be added to the previous pension payment made in that tax period.

The tax will then be recalculated using the existing tax code that you’ve used, in line with Scottish Income Tax rates where the code is a Scottish tax code. This prevents the individual from incorrectly getting the benefit of the tax allowances twice.

You can find guidance on additional payments in a tax period at paragraph 1.12 of CWG2.

In all other circumstances, including where individuals have a P45 from the previous tax year (and regardless of any notification of residency status for the purposes of Pensions Tax Relief at Source), you should use the emergency code on a Week 1/Month 1 basis against the first payment in line with UK tax tables.

We’ll issue a tax code to operate against future payments. You can find information about the emergency code for the 2018 to 2019 tax year in the GOV.UK guide Tax Codes.

Where tax has been deducted using emergency code, Scottish taxpayers have 2 options. They can:

• wait until after the end of the tax year, when HMRC will reconcile their account using their Scottish tax code and make any repayment owed as part of its normal PAYE process
• claim tax back in year by completing form P55, P53Z or P50Z, and HMRC will calculate the overpayment based on Scottish Income Tax rates and make a refund within 30 days of receiving a repayment claim

8. Trust Registration Service

HMRC introduced the Trust Registration Service (TRS) last year to help you and your scheme trustees meet your obligations under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 when you have incurred a UK tax liability.

As we know some pension scheme trustees have had difficulty using TRS we have changed the guidance. This means that now if your registered pension scheme is a trust, your scheme trustees don’t need to register separately on TRS. They can update their details by contacting Pension Schemes Services.

Whether you’ve incurred a UK tax liability or not you must keep the information required under the Money Laundering legislation in your own written records and provide it to us if we ask for it.

If you incur a UK tax liability and choose to register on TRS, you should not register as a new trust if you already have a unique taxpayer reference (UTR) as this will create another UTR and will lead to you or your trustees receiving Self Assessment returns to complete for previous tax years.

If you choose to register on TRS and you’ve told us the value of the trust assets on a 41G paper, SA900 or SA970 tax returns or through another channel, when you register on TRS you should complete the ‘Other Asset’ field on TRS using the term – ‘Already notified’. You should leave all other asset fields marked as ‘£1’.

We’ll publish more guidance on this on GOV.UK and will update you when this is available in a later newsletter.

9. Reporting of non-taxable death benefits

In Pension Schemes Newsletter 96 we explained that we’re continuing to work to resolve the problem of P6 tax coding notices being issued in error for death benefit payments that are entirely non-taxable.

We hope that this will be fixed in the summer and will let you know in future newsletters when the fix is in place. In the meantime, you should continue to follow the guidance we gave you in Pension Schemes Newsletter 78.