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A payment made to or in respect of a
sponsoring employer is a surchargeable
unauthorised employer payment if it is an
unauthorised employer payment that, together with
any other unauthorised employer payments made by the same
registered pension scheme to or in respect of that employer, before
the end of a 12 month reference period equals or exceeds the
surcharge threshold. A reference period begins on a certain date
called the reference date.
Where the surcharge threshold is reached, a surcharge period
is established and all of the unauthorised employer payments in the
surcharge period in respect of the employer are surchargeable
unauthorised employer payments.
A surcharge period starts with the reference date and, where the
surcharge threshold is reached before the end of a period of 12
months beginning from that reference date, ends on the day on which
the surcharge threshold is reached.
RPSM04104740 gives details of what
the surcharge threshold is.
So if in any 12 month period the total unauthorised employer
payments made by a
registered pension scheme in respect of a
sponsoring employer are less than the surcharge threshold the
unauthorised payments surcharge will not apply to
those unauthorised payments.
The reference date is the date of payment of the first
unauthorised employer payment made by the scheme to or in respect
of the sponsoring employer.
Subsequent reference dates will occur on the payment of an
unauthorised employer payment to or in respect of the same employer
after the end of a reference period.
A reference period starts with the reference date and ends on the earlier of
So the first reference date will be the date of payment of the
first unauthorised employer payment to or in respect of the
sponsoring employer. The first reference period will run from the
first reference date until the surcharge threshold is reached or
until 12 months later if earlier.
The second reference date will be the date of first payment
of an unauthorised employer payment to or in respect of the
employer after the first reference period. The second reference
period will run from the second reference date until the earlier of
12 months later or the surcharge threshold is reached.
The method of calculation of surcharge periods described
above for a sponsoring employer of a registered pension scheme
applies equally to the payment of unauthorised employer payments to
or in respect of a former sponsoring employer.
The method of calculation also applies to unauthorised
employer payments made to a person who was a sponsoring employer in
respect of one or more unauthorised payments and a former
sponsoring employer in respect of other such payments. For example,
a reference period starts when a registered pension scheme makes an
unauthorised employer payment to a sponsoring employer (payment 1).
Payment 1 does not reach the surcharge threshold. Six months later,
that person stops being a sponsoring employer and immediately
afterwards the scheme pays another unauthorised employer payment to
that, now, former sponsoring employer (payment 2). Payment 1 is
considered with payment 2 to determine whether or not the surcharge
threshold is now reached.
RPSM04104750 gives an example of
surchargeable unauthorised employer payments.
| Glossary ( RPSM20000000) |
