Guidance

Newsletter 167 — March 2025

Published 3 March 2025

Managing pension schemes service

Pension scheme return (PSR)

With just over a month to go until the release of the pension scheme return (PSR) on the Managing pension schemes service, we are taking this opportunity to remind you how you can prepare for the new 2024 to 2025 pension scheme return.

From April 2025, you will need to submit any returns for the tax year 2024 to 2025 onwards on the Managing pension schemes service. You will not be able to file a PSR for the tax year 2024 to 2025 onwards on the Pension schemes online service.

HMRC will send you a notice to file your returns for the 2024 to 2025 tax year schemes on the Managing pension schemes service. The notice to file will state the deadline for submitting your PSR.

There are two types of PSR:

• standard
• self-invested person pension (SIPP)

The type of scheme you have registered will determine which PSR you will have to complete.

We’ll ask for more information than we used to for previous PSRs that were completed on the Pension schemes online service. In future years, some of the information will be pre-populated making the process more streamlined.

Depending on the size of the scheme, different information will be required as part of the return. For a pension scheme that requires a standard PSR, a full return (including members’ details) will only be required for schemes with fewer than 100 members. Most schemes will need to provide designatory details.

To help prepare, you can read further guidance about changes to 2024 to 2025 pension scheme return for Pension Scheme Administrators.

Migrating your pension schemes

Migrating your pension schemes to the Managing pension schemes service allows you to see all your schemes in one place and benefit from real-time updates so that you can:

• immediately see changes
• view submitted information
• view details of payments and charges

You can view a list of your open pension schemes registered on the Pension schemes online service on the Managing pension schemes service before you migrate.

You’ll need to enrol on the Managing pension scheme service before you can view the list of schemes.

Once enrolled, you should select ‘Add a pension scheme from the Pension schemes online service’ and select each scheme you need to migrate.

You should not select ‘Apply to register a new pension scheme’.

Only pension schemes with a status of ‘open’ on the Pension schemes online service will be included on your list of schemes to migrate. If you can see schemes on your list that are inactive and should be wound up, you should email: migration.mps@hmrc.gov.uk and put ‘Managing pension schemes — Wound Up Schemes’ in the subject line.

Incorrect re-registrations

If you’ve incorrectly tried to re-register an existing pension scheme that you’re an administrator for, email: migration.mps@hmrc.gov.uk and put ‘Incorrect scheme registration’ in the subject line.

Financial Information 

We’re in the process of enhancing the detail of financial information available to you within the Managing pension schemes service. 

This update will allow pension scheme administrators and practitioners to view more accounting detail within the scheme and administrator’s financial information.

The enhancements include:

• a more detailed overview of due and overdue penalties and charges, including cleared amounts and interest accruing
• details of payments allocated to charges and penalties
• details of cleared charges and penalties
• a breakdown of a credit balance available for refund

We hope to release this update by 31 March 2025 and we’ll keep you updated in future newsletters.

Qualifying Recognised Overseas Pension Schemes (QROPS)

Transfers to Qualifying Recognised Overseas Pension Schemes (QROPS)

Following feedback from pension scheme administrators, we have updated the Pension schemes: member information (APSS263) form to include the amount of the available overseas transfer allowance.

This form is completed by pension scheme members to give scheme administrators information to transfer sums or assets held to a QROPS.

Aligning the treatment of transfers to Overseas Pension Schemes (OPS) and Recognised Overseas Pension Schemes (ROPS) established in the European Economic Area (EEA)

At the UK Autumn Budget 2024 it was announced that from 6 April 2025, the conditions schemes established in the EEA need to meet to be an OPS and ROPS will be brought in line with the conditions that must be met by schemes established in the rest of the world.

An OPS will be required to be regulated by a regulator of pension schemes in that country. This means that to be an OPS, both occupational and non-occupational pension schemes must be regulated by a regulator of such schemes. If there is no regulator of non-occupational schemes, the scheme provider must be regulated by a regulator of providers of pension schemes for the purposes of establishing that scheme.

A ROPS must be established in a country or territory with which the UK has a Double Tax Agreement providing for the exchange of information, or a Tax Information Exchange Agreement.

In April 2025, we will be writing to scheme managers of QROPS in the EEA asking them to confirm that they meet these conditions. If we don’t receive a response or they confirm that they don’t meet the new conditions, the scheme will cease to be a Qualifying Recognised Overseas Pension Scheme.

Lifetime allowance (LTA) abolition — lump sum reporting

Reporting a pension commencement excess lump sum (PCELS) and stand-alone lump sum (SALS)

In the lifetime allowance guidance newsletter March 2023 we provided details of how to report a PCELS and in pension schemes newsletter 151 we provided details of how to report a SALS.

Following this guidance, we have received several queries about the requirement to provide the customer with a P45 when reporting a PCELS or SALS. For example, when there is also a continuing source of regular pension income. We have provided more information about reporting PCELS and SALS.

Reporting pension commencement excess lump sums (PCELS)

When reporting a PCELS through Real Time Information (RTI) you should set up a separate payroll record to the one being used to report any regular ongoing source of pension income. It is very important to report a PCELS in this way to prevent any potential adverse impact on a customer’s tax record. 

Reporting a PCELS in this way and keeping it separate from any ongoing payment of regular pension income, which should be reported under a separate payroll ID, will help:

• provide clear information for the individual’s tax records
• prevent issues with coding and potential problems with a customer’s tax record, such as over inflated estimated pay

Keeping them separate should also ensure there is no impact on any ongoing payment of regular pension income as this source should have been reported using a different payroll ID. This will allow HMRC systems to continue to treat the regular pension income as an ongoing income source. 

When reporting a PCELS you should use a pay frequency of ‘one-off’ and use the date of payment as the leaving date. You should also give the customer a P45 as they will need this if they want to reclaim any tax deducted from the PCELS, that may be due back from HMRC.

We will not be able to deal with any repayment claim without the P45. 

For further detailed information on what data items you should complete to report a PCELS paid in the 2024 to 2025 tax year you should follow the guidance in the lifetime allowance guidance newsletter March 2023.

For a PCELS paid from the 2025 to 2026 tax year onwards you should use new data field 219 (pension commencement excess lump sum) to identify the lump sum. You will also need to include the taxable element of the payment in data field 173 (flexible drawdown taxable payment). Further detailed guidance can be found in paragraph 2.2.9 in section 2 of the 2025 to 2026 CWG2: further guide to PAYE and National Insurance contributions.

Reporting stand-alone lump sums (SALS)

You only need to report a SALS through RTI if there is an excess over the permitted maximum.

Similar to a PCELS, when reporting a taxable SALS through RTI you should set up a separate payroll record. You should also use a pay frequency of ‘one-off’ and use the date of payment as the leaving date. You should also give the customer a P45 as they will need this if they want to reclaim any tax deducted from the SALS, that may be due back from HMRC.

We will not be able to deal with any repayment claim without the P45. 

For SALS paid in the 2024 to 2025 tax year you should continue to follow the guidance in pension schemes newsletter 151.

To report a SALS paid from the 2025 to 2026 tax year onwards you should use new data field 220 (stand-alone lump sums) to identify the lump sum. You will also need to include any taxable and non-taxable element of the payment in data fields 173 (flexible drawdown taxable payment) and 174 (flexible drawdown non-taxable payment). 

Further detailed guidance can be found in paragraph 2.2.10 in section 2 of the 2025 to 2026 CWG2: further guide to PAYE and National Insurance contributions.

Relief at source

Making permanent change to relief at source processes

In pension schemes newsletter 155, we extended alternatives to providing wet signatures on the APSS105, APSS106 and APSS590 form declarations until 31 March 2025.

This change is now permanent. This means that going forward HMRC will accept scanned relief at source forms:

• emailed by the authorised signatory ― in this circumstance we will accept the form without a signature
• signed and emailed by someone else providing we also receive a separate email directly from the authorised signatory authorising them to submit the form

For APSS105 and APSS106 declarations, email: pensionschemes.reliefatsource@hmrc.gov.uk.

For APSS590 declarations, email: reliefatsource.administration@hmrc.gov.uk.

Update on digitisation of relief at source

In pension schemes newsletter 154 we told you that we had postponed delivery of the digital relief at source service.

This service will not be operative until April 2028 at the earliest to allow more time to deliver an ambitious programme of government reform. We will engage with you during the next stages of this project and provide updates in future newsletters.