Guidance

Pension schemes newsletter 97 - March 2018

Published 28 March 2018

1. Relief at source for Scottish Income Tax

a. Form APSS106

We explained in pension schemes newsletter 91, that we’re amending the registered pension schemes relief at source annual claims (APSS 106) from April 2018 to include information about contributions made by members who pay Scottish Income Tax and the tax relief you’re reclaiming on these contributions.

We know that you still need to use the current version of the APSS106 for annual claims for the tax year 2017 to 2018 and earlier, so we’ve created a separate version of the form that you should use for annual claims from 2018 to 2019.

The new form will be published alongside the existing form. We’re amending the titles of each form so that you know which one to use and we’re adding more information to the web page where you access the forms.

b. Amendment to the Relief at Source Regulations 2018

In the pension schemes relief at source for Scottish Income Tax newsletter - February 2018 we published details of the The Registered Pension Schemes (Relief at Source)(Amendment) Regulations 2018.

These regulations make the annual return of individual information a statutory return from 6 April 2018 for pension scheme administrators operating relief at source. For the annual return of individual information for tax years from 2017 to 2018 onwards, you’ll only need to give details of each member whose paid a net contribution to the scheme in the year of assessment.

This means you no longer need to include members on your annual return who’ve not made a net contribution (or had a net contribution made for them) in the tax year of assessment. But you can still enter these members on your annual return of individual information if you choose to do so.

c. Unmatched members on the notification of residency status report

You may have received unmatched records on your notification of residency status report (marked as a ‘U’). The reasons for this include:

• using unstructured data on your annual return of individual information
• incorrect personal information submitted for your scheme members that we couldn’t trace

If you:

• submitted unstructured data on your annual return of individual information
• you’ve received updated information from your members

you can use our service to look up the residency status of your member(s).

If you still have unmatched members after using the service, you should use the rest of UK residency status as a default for the 2018 to 2019 tax year and where possible, use corrected information for future returns.

To do this contact your scheme member(s) and check the information you hold. If the scheme member can help you correct the data, you can update your records and submit their correct details on your next annual return of individual information.

If you’re still unable to reconcile the information with your scheme member, you should tell them to check their details on their personal tax account or contact the National Insurance general enquiries to confirm their correct National Insurance number and personal details.

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

We explained in the pension schemes relief at source for Scottish Income Tax newsletter December 2017 that you can use our service to:

• look up the residency status of new members joining your scheme
• who won’t be included on your notification of residency report

In the notification of residency status report sent to you in January each year, we’ll only give you a residency status for those members who were included on your previous annual return of individual information. For example, individuals included on your annual return of individual information for the 2016 to 2017 tax year will have appeared on the notification of residency status report that we issued to you in January 2018.

If you’re looking up the residency status of members for relief at source using the service between 6 April and December, the service will give you the current tax year’s (CY) residency status.

If you use the service after annual coding in January and before 5 April each year, the service will give you the residency status for both the CY and the next tax year (CY+1).

If you’re using the service to obtain the CY+1 residency status, you may find the CY status the service gives you is different from the one you’ve been applying for your member in the current tax year. But you should continue to use the rate you’ve been applying for this member until the end of the current tax year.

This is because you must use the same residency status for the whole tax year. If this means that your member receives the wrong amount of tax relief, HMRC will deal directly with them to correct it.

At the start of the new tax year you can then apply the CY+1 residency status given by the service.

If you’re using the service to look up the residency status of new members for relief at source we’d encourage you to keep a copy of the results from the service. For example you could take a screen shot showing the residency status given by the service.

e. Secure Data Exchange Service (SDES) enrolment for existing pension scheme administrators

We explained in the pension schemes relief at source for Scottish Income Tax newsletter - December 2017, that from April 2019 you’ll only be able to submit your annual return of individual information electronically through SDES.

So if you’ve not already enrolled for SDES, you must do this before April 2019 so that you can submit your 2018 to 2019 annual return of individual information. There’s guidance that tells you how to do this.

We’d encourage you to enroll for SDES as soon as possible, because you can also use the service to submit your annual return of individual information for 2017 to 2018.

f. More information on relief at source for Scottish Income Tax

You can find more information about:

• how to access the service to look up a member’s residency status for relief at source
• how you can help us with our user research into the service
• the application programming interface (API) we’re developing for the service

in pension schemes newsletter 96 and the pension schemes relief at source for Scottish Income Tax newsletter - February 2018.

2. Relief at source – excess relief

We explained in pension schemes newsletter 96 that the Registered Pension Schemes (Relief at Source)(Amendment) Regulations 2018 introduced a 90 day deadline for scheme administrators to:

• give HM Revenue and Customs (HMRC) specific information about excess relief claimed
• repay the excess relief to HMRC

We’re aware that some scheme administrators need time to update their systems to tell us the information needed by the regulations. To help you with this we’re introducing transitional arrangements for 2018 to 2019. So when you tell us about excess relief at source you’ve claimed, we expect you to give us as much information as you can about this in a schedule submitted with your claim form.

We won’t routinely reject your notification of excess relief because you didn’t tell us all of the information needed. But we may contact you to ask for more information.

3. Form APSS262 – reporting overseas transfers

We’re amending the APSS262 to fix a validation problem on the boxes that ask for monetary amounts on the form. If you access the form using some browsers, these amounts may automatically be rounded down to the nearest whole pound. This may cause problems with the validation of these amounts later in the form.

If you’re having difficulties in completing the APSS262, make sure that you enter the amounts in the same format throughout the form.

4. New pensions online service newsletter

We explained in pension schemes newsletter 96, that we’re working on a newsletter about the new pensions online service. The newsletter will update you on our progress and give more information about the next information technology (IT) releases. We aim to publish this newsletter in April 2018.

5. Finance Act 2018

On March 15 2018, Finance (No 2) Bill 2017 gained Royal Assent to become Finance Act 2018. Finance Act 2018 makes changes to the legislation for registering and de-registering pension schemes from April 2018. This affects pension schemes that:

• are Master Trusts
• have a dormant company as a sponsoring employer

The Pensions Tax Manual and other pensions guidance on GOV.UK will be amended in April 2018 to reflect the new legislation.

6. Annual allowance

a. Annual allowance calculator – calculations for 2016 to 2017

We’re aware of an error with the annual allowance calculator in the section ‘What were your pension savings in the tax year 2017 to 2018?’ This section tells users to enter all pension savings for 6 April 2016 to 5 April 2017. This should read ‘Include all savings for 6 April 2017 to 5 April 2018’.

We’re working to correct this as soon as possible and we’ll tell you in a future newsletter when this has been corrected. We’re sorry for any confusion caused by this error.

b. Annual allowance guidance

We’ve published new guidance called pension schemes: work out your reduced (tapered) annual allowance to help scheme members work out their tapered annual allowance.

7. Outstanding accounting for tax (AFT) charges

We explained in pension schemes newsletter 95 that while working on the new pensions online service we identified some outstanding AFT charges on the existing service.

We’ve written to scheme administrators setting out any outstanding AFT charges. Thank you to those scheme administrators who have replied about these AFT charges.

If you’ve received a letter from us but haven’t contacted us, we’ll be writing to you again soon.

If you think you’ve already paid these charges, you’ll need to give us details of the payment you made. We set out these details in the letter that we sent you and you can also find these in pension schemes newsletter 92. Once we have these details, we’ll then allocate your payment against the right charge.

If the charges are still outstanding, you’ll need to pay the outstanding amount. If your payment is or was late, we may charge you penalties under Schedule 56 of Finance Act 2009 and you’ll have to pay interest on the late payment.

You can help us with this by making sure that all payments you make contain the relevant charge reference number. You can find more information about paying tax to HMRC in pension schemes newsletter 92 and in the guide pension scheme administrators: how to pay tax.