RPSM04104610 - Technical Pages: Taxation: Unauthorised payments: Unauthorised payments surcharge

The unauthorised payments surcharge

An income tax charge called the unauthorised payments surcharge will apply if unauthorised payments made by a registered pension scheme go above a set threshold within a certain time period. Unauthorised payments to which the surcharge applies are known as surchargeable unauthorised payments.

The unauthorised payments surcharge is paid in addition to the unauthorised payments charge.

Surchargeable unauthorised payments will be either

• surchargeable unauthorised member payments – see RPSM04104630 for details
• surchargeable unauthorised employer payments – see RPSM04104730 for details.

The person liable to the charge will depend on whether the payment is a surchargeable unauthorised member payment or a surchargeable unauthorised employer payment. RPSM04104620 sets out who is liable to the unauthorised payments surcharge.

Amount of the unauthorised payments surcharge

The rate of the unauthorised payments surcharge is 15%, based on the amount of the surchargeable unauthorised payment. So together with the unauthorised payments charge the total tax liability in respect of a surchargeable unauthorised payment is 55%.

The surcharge is a freestanding tax charge, which means any losses a taxpayer may have cannot be set against the tax charge.