RPSM04104520 - Technical Pages: Taxation: Unauthorised payments: Unauthorised payments charge: Reports

Reporting and paying the unauthorised payments charge

The scheme administrator should report the details of any payment of an unauthorised payment on the Event Report. The Event Report should be submitted to HMRC by 31 January following the end of the tax year in which the unauthorised payment is made. If the scheme has wound up, the Event Report should be submitted to HMRC by the earlier of

• the end of 3 months beginning with the date that the scheme completed winding up, or
• 31 January following the end of the tax year in which the unauthorised payment is made.

The person liable to the unauthorised payments charge should declare the payment on their Self Assessment return. Where someone does not receive a Self Assessment return they should report their chargeability to tax in respect of the payment to HMRC.

It is possible that certain payments might be made by a registered pension scheme that are seemingly unauthorised payments but are not unauthorised payments as the payments are made in genuine error and, once spotted, are rectified as soon as reasonably possible. For more details see RPSM12101020.

Very small errors that do not exceed £250 in total and which are made in certain circumstances do not have to be reported (and nor will HM Revenue and Customs seek to collect the tax that, in strictness, would be due in respect of the unauthorised payment). For more details see RPSM12101040.

[The Registered Pension Schemes (Authorised Payments) Regulations 2009 (SI2009/1171)]

These Regulations were made in May 2009 and authorise a range of payments from registered pension schemes. The payments covered by the regulations fall into one of two broad categories; small lump sums or certain payments made in error.

The regulations relating to small lump sums apply only to payments made on or after 1 December 2009, provided the payment meets certain conditions. Payments that meet these conditions but were made before 1 December 2009 would still be unauthorised payments and details of them should be reported on the Event Report. More details about small lump sums covered by these regulations are in RPSM09105400 onwards.

However, the regulations relating to the certain payments made in error apply retrospectively. Provided certain conditions are met, the regulations apply to payments made on or after 6 April 2006. As a consequence, it is possible that payments meeting these conditions were reported as unauthorised payments because the payments were made before the regulations took effect retrospectively. If a scheme sanction charge assessment is received in respect of such a payment, the scheme administrator can appeal against it in the normal way. Individuals who have reported such payments on their Self Assessment return should contact HMRC about their return. More details about the certain payments made in error covered by these regulations are in RPSM09108000 onwards.