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HMRC internal manual

Pensions Tax Manual

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HM Revenue & Customs
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Information and administration: other information requirements for scheme administrators: information needed from third parties

Glossary PTM000001
   

Regulation 15A The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567

For guidance on the information that third parties might need to give for tax years 2011-12 to 2014-15 and the deadlines for providing the information see the Registered Pension Schemes Manual on the National Archives website (external readers please see http://webarchive.nationalarchives.gov.uk/*/http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM06107530.htm).

If a registered pension scheme contains either:

  • defined benefit arrangements
  • cash balance arrangements, or
  • hybrid arrangements

the scheme administrator will probably need information from a third party to enable them to calculate a member’s pension input amount.

To cater for this the legislation puts a requirement on employers and other persons to supply information to scheme administrators.

Who is required to give information to scheme administrators
Information that should be provided
How information should be provided
When must the information be provided
What happens if the information is not provided on time
What happens if incorrect information has been given

Who is required to give information to scheme administrators

If a scheme contains a defined benefit, cash balance or hybrid arrangement the following people (the responsible person) must give information to the scheme administrators for a tax year:

  • sponsoring employers in occupational pension schemes about employees (including directors) that are active members at any time in the pension input period
  • any person (including an employer) who is responsible for giving a scheme administrator information enabling them to calculate the pension input amount for someone who was an active member at any time during the pension input period.

This information requirement goes further than just employers. Some schemes allow access to non-employees or self-employed individuals. The benefits for such individuals will probably not be based on a traditional amount of salary received from an employer, but around another factor. As this type of member does not have an employer the scheme administrators will need information from someone else, for example the member themselves or their accountant.

The statutory requirement falls on the person responsible for supplying the information to the scheme administrator. They, in turn, may need to rely on another party to get the information which they then supply to the scheme administrator. However, the legal obligation for supplying the information remains with the responsible person and the legal obligation does not filter down to anyone else who may hold information.

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Information that should be provided

The legislation doesn’t provide an exact list of the information that needs to be given to the scheme administrator. The requirement is that the scheme administrator is given such information that will enable them to work out the member’s pension input amount. So this could include details of:

  • an individuals’ basic pay
  • overtime or bonus pay, or
  • numbers of hours worked by employee.

It all depends on how the benefits promised under the pension scheme have been designed. The more unusual the scheme design the more unusual the information that needs to be provided. For example a few defined benefit arrangements are open to self-employed individuals. If the pension is based on self-employed profits the scheme administrator needs details of the profits made before they can calculate the pension input amount.

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How information should be provided

Information should be given to the scheme administrator automatically.

The legislation doesn’t specify how the information should be provided to the scheme administrator. This is something for the scheme administrator to agree with the responsible person. In designing processes the responsible person needs to bear in mind all of the following:

  • the need for an audit trail. A responsible person needs evidence to satisfy the scheme and HMRC that they have complied with the requirement to provide the information, and
  • the requirement to keep information set out at PTM160200.

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When must the information be provided

The information must be given to the scheme administrator by 6 July following the end of the tax year.

Information relating to pension input periods ending in 2008-09, 2009-10 and 2010-2011 only needs to be provided if the scheme administrator asks for it. The deadline for providing the information for these tax years is three months from the date of receipt of the scheme administrator’s request.

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What happens if the information is not provided on time

Section 98(1) Taxes Management Act 1970

If the required information is not supplied on time the person responsible for giving that information to the scheme administrator can be liable to the penalties described at PTM160800.

The person responsible for supplying information to the scheme administrator could themselves be dependent on getting information from another party.

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What happens if incorrect information has been given

Section 98(2) Taxes Management Act 1970

The most important thing is to give the correct information to the scheme administrator as soon as an error has been identified.

Penalties can be given for supplying incorrect information in accordance with PTM160800.