RPSM05300090 - Scheme Administrator Pages: Contributions and tax relief: Member contributions - overview: Contribution due on a particular date but the payment was not received until later

The member was due to make a payment on a particular date but the payment was not received until later. What consequences does this have?

This may require a review to establish exactly why the payment was not received on the date expected. If it was due to the failure of the direct debit system to make the payment as opposed to a lack of funds or delay due to the member’s actions that caused the payment to be late you can accept the contribution was paid on the original date. This is provided you held a fully completed direct debit mandate under which payment was due on that date.

However, if the payment was late because a cheque was not honoured then a valid contribution will be deemed to have been made on the date the cheque was re-presented (and subsequently cleared). Similarly if a direct debit is not paid because there are insufficient funds in the payee’s account then a valid contribution will be made on the date when the scheme reprocesses the direct debit and actually receives the funds.

The circumstances of the delay are particularly important where the payments are made near to the beginning/end of the tax year or a pension input period (see RPSM05300100).