Find the residency status of your members to give them the right tax relief using relief at source.
As a pension scheme administrator using relief at source you’ll need to know the residency status of each of your scheme members. You can then give them the right tax relief and reclaim it from HM Revenue and Customs (HMRC).
You must use the residency status information provided by HMRC. You can find this in your annual notification of residency status report for existing members. It can take up to 2 tax years for a new member to be included on your annual report.
The annual report uses the information you supplied on your annual return of individual information. If you didn’t submit the return for the previous tax year, you won’t have received an annual report to use for the following tax year.
If a member’s status doesn’t appear on your annual report, before you apply relief at source, you must use the ‘rest of UK’ residency status for them. This is also the case if you don’t have an annual report.
You must apply the same tax rate for a member for the whole of the tax year, even if their residency status changes.
If your member has received the wrong amount of tax relief, HMRC will deal directly with them to correct it.
Find the residency status of existing members
You should use your annual notification of residency status report, which HMRC will make available in January each year. You’ll need to register for the Secure Data Exchange Service (SDES) to get this.
As a scheme administrator, you should have registered for SDES or been transferred to it automatically if you were already using secure electronic transfer, known as ‘SET’.
HMRC will send you an email each year when your annual notification of residency status report is available in SDES for you to download. When you access SDES, make sure the email address for this notification is correct.
If you successfully submitted more than one annual return of individual information, you’ll receive a report for each annual return you submitted.
You need to sign in to SDES and download the report within 144 hours (6 days) from when HMRC make the file available to you to download.
What your annual report will tell you
The report will give you a residency status for each of your scheme members which you included in your annual return. The ‘Residency tax status’ column will show:
- ‘S’ - Scottish residency status
- a blank field - ‘rest of UK’ residency status (resident in England, Northern Ireland or Wales)
- ‘U’ - the member hasn’t been matched to a National Insurance number
If you included an incorrect National Insurance number for a member in your annual return, the report may provide the correct one in an extra field. Use this to update your records.
You need to tell HMRC by emailing MDTSSETCustomerManagement@hmrc.gsi.gov.uk if you:
- can’t open your report because the file is corrupt
- haven’t received your report by the end of January and you haven’t been contacted by HMRC
- didn’t download the report in time
In your email you must include your scheme administration reference number which HMRC allocated to you for monthly and annual tax relief at source repayments. It’s a letter followed by 4 numbers, a ‘/’ and another 2 numbers. However, you must replace the letter for a ‘P’, so A1234/01 would become P1234/01.
Members without a residency status result
Where a member doesn’t have a residency status of Scotland or ‘rest of UK’ in the annual report, you’ll need to check you’ve got the correct details.
A residency status also won’t be shown for members who have died.
If you think all the information you have is correct, your scheme member will need to contact National Insurance general enquiries to check their details.
As mentioned previously, for any members without a residency status for relief at source by the time you apply it to their contributions, you must treat them as having a ‘rest of UK’ status.
Members not covered
If your member:
- is under 16 years old, treat the residency status as England, Northern Ireland or Wales
- doesn’t have a National Insurance number and is over 16 years old, you’ll need to ask the member to contact National Insurance general enquiries
- has died, you need to contact HMRC’s pension scheme enquiries
Find the residency status of new members
A service will be available in the near future which you’ll be able to use in order to look up the residency status of any member not on the annual report.
Use the ‘rest of UK’ residency status for new members until the look up service is available.