RPSM04300020 - Scheme Administrator Pages: Taxation: Scheme administrator's tax liabilities: Accounting for tax

Accounting for tax

Registered pension schemes must have a scheme administrator. Under Part 4 of Finance Act 2004, the scheme administrator is the person or persons responsible for fulfilling certain functions defined in that legislation in connection with a registered pension scheme.

One of the obligations of the scheme administrator is being liable for payment of certain tax charges under Part 4 of Finance Act 2004 in connection with the scheme. If more than one person is appointed as scheme administrator, each is jointly and severally liable for any tax charges or penalties.

More information about the role of the scheme administrator can be found in RPSM02301000 and RPSM02302000.

How does a scheme administrator account for its tax liabilities?

The scheme administrator of a registered pension scheme must make returns to HMRC of the income tax to which the scheme administrator is liable under Part 4 Finance Act 2004. RPSM04301020 gives a list of the tax charges for which a scheme administrator might have to make a return. A return for this purpose means details of the income tax liability that has occurred and payment for that liability.

When a scheme administrator does have a tax liability, the return that the scheme administrator must complete to account for that liability is called the Accounting for Tax return.

Are the scheme administrator’s tax liabilities within self-assessment?

The scheme administrator’s tax liabilities under Part 4 of Finance Act 2004 are not within the self- assessment procedures. Therefore any tax liabilities of a scheme administrator should not be included in any self-assessment return that the trustees of the same pension scheme may complete in respect of that scheme. The tax liabilities of the scheme administrator are taken out of self-assessment by S9(1A) Taxes Management Act 1970.

When must a liability be returned?

Most of the scheme administrator liabilities are triggered on the making of certain payments by a registered pension scheme. The making of those payments determines when the return must be made. The exception is when a scheme has its registration withdrawn, when the liability is triggered on the withdrawing of that registration.

Where income tax has been charged on the scheme administrator by Part 4 Finance Act 2004, the return for that liability must be made for the appropriate quarterly return - ending with 31 March, 30 June, 30 September or 31 December. For example, if a scheme administrator is liable to tax in respect of a payment that was made on 4 September 2006, the administrator must make a return to the HMRC in respect of the three-month period ending 30 September 2006.

When must the return be delivered

The return in respect of one of any of the three-month periods mentioned in the previous paragraph must be made before the end of the period of 45 days beginning with the day immediately following the end of the three month period in question, as follows:

• For tax charged in the period ending with 31 March the return must be made no later than 15 May.
• For tax charged in the period ending with 30 June the return must be made no later than 14 August.
• For tax charged in the period ending with 30 September the return must be made no later than 14 November.
• For tax charged in the period ending with 31 December the return must be made no later than 14 February.