HMRC internal manual

Debt Management and Banking Manual

DMBM570020 - Debt and return pursuit: miscellaneous charges: pension fund surplus refunded to employer - ICTA88/S601

Action by pension scheme

The Pension Scheme Surpluses (Administration) Regulations 1987, which came into effect on 7 April 1987, require administrators of pension funds to

  • deduct tax from surpluses refunded to employers after 18 March 1986
  • pay the tax deducted to HMRC and
  • provide details of the refund made to the employer.

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Accounting for tax deducted

The tax paid by the administrator will be allocated to the assessment which will be made on the employer as an amount under corporation tax or income tax, depending on whether the employer is a company or not.

The assessment is made under ICTA88/S601 and charges tax on the gross amount of the repayment. It is entirely separate from any other income of the employer, which is assessed in the normal way.

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Debt technical office action

If you receive a work item where payment of the tax or interest has not been made after application

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • telephone, or exceptionally call on, the employer for payment.

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Payment not made

In the absence of payment, send the papers with a covering report, including prospects of local recovery, to the Enforcement Technical Team (Debt Management Bradford) (in Scotland, to Enforcement Technical Team, Edinburgh) for consideration of recovery proceedings against the employer or assessment on the administrator (of the pension fund).