Guidance

Newsletter 174 — October 2025

Published 30 October 2025

Winding up a scheme and pension scheme return

In pension schemes newsletter 171 — May 2025 we explained that if your pension scheme has wound up and you’ve received a notice to file a pension scheme return for the 2024 to 2025 tax year, you must submit the pension scheme return before reporting the wind up on the Event Report.

If you have not already, you will need to migrate your pension scheme onto the Managing pension schemes service to report the wind up on the Event Report.

If your pension scheme was open during the 2025 to 2026 tax year, once you’ve submitted the Event Report to wind it up, you’ll receive a notice to file a pension scheme return for 2025 to 2026. This return will be due within 3 months of the notice being issued.

There is now a short video giving a step-by-step walkthrough of:

• the process to enrol onto the Managing pension schemes service
• how to migrate your schemes onto the Managing pension schemes service

Watch Enrolling and migrating to the Managing pension schemes service on YouTube.

If you are having issues with migrating a pension scheme, you should email migration.mps@hmrc.gov.uk and put ‘Managing pension schemes — Migrating Pension schemes’ in the subject line.

UK resident pension scheme administrators

In pension schemes newsletter 170 — May 2025 we confirmed that with effect from 6 April 2026, all pension scheme administrators of a UK registered pension scheme must be UK resident.

If you are an existing non-UK pension scheme administrator, there are actions you must take before 6 April 2026 to remain compliant.

Appoint a UK resident pension scheme administrator

If you’re the only pension scheme administrator of an open pension scheme, you must appoint a UK resident pension scheme administrator and add them to your scheme on the Managing pension schemes service, the pension schemes online service, or both, before 6 April 2026.

Remove yourself as a pension scheme administrator from an ‘open’ scheme

If there is another pension scheme administrator that is UK resident attached to the pension scheme with a status of ‘open’, you should remove yourself as the pension scheme administrator on the pension scheme no later than 5 April 2026.

To remove yourself as the pension scheme administrator on the Managing pension schemes service, log into the Managing pension schemes service, select the pension scheme from your list of schemes and select ‘view or remove scheme administrator’. Once you’ve done this, you should de-enrol yourself from the service. You can do this by selecting ‘stop being a pension scheme administrator’.

To remove yourself as the pension scheme administrator on the pension schemes online service, follow the guidance in section 6.13 of the pension schemes online user guide. Once you’ve done this, you should email pensions.administration@hmrc.gov.uk and put ‘Non-UK PSA — de-enrol’ in the subject line so we can remove you from the pension schemes online service.

De-enrol yourself as a pension scheme administrator from the services

If you’ve never been a pension scheme administrator of a pension scheme or you are no longer a pension scheme administrator of a pension scheme with a status of ‘open’, you must remove yourself from the services before 6 April 2026.

To de-enrol yourself from the Managing pension schemes service, you must log into the Managing pension schemes service and select ‘stop being a pension scheme administrator’.

To de-enrol yourself from the pensions scheme online service, you should email pensions.administration@hmrc.gov.uk and put ‘Non-UK PSA — de-enrol’ in the subject line so we can remove you from the service.

UK mailing or c/o address

If you’re a pension scheme administrator of a pension scheme with a status of ‘open’ and your address uses a UK mailing address or UK c/o address, this does not itself make you a UK resident pension scheme administrator. You will need to appoint a UK resident pension scheme administrator before 6 April 2026 and add them to your scheme on the Managing pension schemes service, the pension schemes online service, or both.

Practitioner appointments

If you have appointed a practitioner to act on your behalf for a pension scheme on either service, this appointment will automatically cease when you remove yourself as scheme administrator. To continue to be an authorised practitioner for the scheme, they will have to be appointed by a UK resident pension scheme administrator acting for the pension scheme.

Qualifying recognised overseas pension schemes (QROPS)

User research

In pension schemes newsletter 173 — September 2025, we invited pension scheme administrators and pension scheme practitioners to take part in user research to support the next stage of the ‘Report a transfer to a QROPS’ project.

You can choose which activities you wish to be involved in. Email laura.klonowska@digital.hmrc.gov.uk to sign up.

Returning tax free lump sums

This newsletter article addresses common themes raised following the article in pension schemes newsletter 173 — September 2025 on returning tax free lump sums.

Legislative provisions

There are no legislative provisions for tax free lump sums to be returned to a registered pension scheme and for the tax consequences to be undone.

Tax consequences when a pension transfer contract with a pensions commencement lump sum is cancelled

As a pensions commencement lump sum has been taken, the associated tax consequences (including the use of the individual’s lump sum allowance and lump sum death benefit allowance) cannot be undone, even if the payment is returned or cancellation rights are exercised for the pensions transfer.

Lump sum allowance and cancellations

The conditions as set out in tax legislation will need to be met in order for the pension commencement lump sum or uncrystallised funds pension lump sum to remain an authorised payment if cancellation rights are chosen to be provided and those rights are exercised.

If a payment is classified as an unauthorised payment, it will not use up the lump sum allowance or lump sum and death benefit allowance as the payment of an unauthorised payment is not a relevant benefit crystallisation event.

Cancellation rights of annuity payments, drawdown payments, small pot payments and standalone lump sum payments

Details can be found about cancellation rights at the Financial Conduct Authority (FCA).

When offering cancellation rights, registered pension schemes should continue to ensure that members are aware of the tax consequences if those rights are exercised. As explained in pension schemes newsletter 173 — September 2025, the tax consequences will not be undone when cancellation rights not expressly required by FCA rules are exercised.

When the recycling rule applies

Detailed guidance about the recycling rule can be found in PTM133810 of the Pension Tax Manual.

HMRC’s approach to pension commencement lump sum and uncrystallised funds pension lump sum transactions that have already been cancelled

We may challenge alternative interpretations of the tax consequences of tax-free lump sums that have been returned after 5 December 2024, when the position was made clear.

We expect registered pension schemes to tell members of their reduced lump sum allowance and lump sum death benefit allowance or report unauthorised payments in the usual way.

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 2025 to 30 September 2025, we processed:

• P55 — 9,340 forms
• P53Z —3,576 forms
• P50Z —805 forms

Total value repaid: £48,560,205

The tax repayment figures for the period 1 October 2025 to 31 December 2025 will be published in pensions schemes newsletter ― January 2026.

Registration statistics

For the period 6 April 2025 to 30 September 2025 HMRC received in total 1,057 applications to register new pension schemes.

Of these applications, 38% have been registered and HMRC has currently refused registration for about 20% of applications. No decision has yet been made on the outstanding applications.

Applications to register new pension schemes

This is a reminder that when we update the status of an application to register a new pension scheme, you can view this online, but all letters are sent by post. This means that you’ll be able to see the updated status before you receive the letter.

You should wait until you have received a letter before contacting HMRC about any status updates. If you have not received a letter after two weeks, then contact us.