RPSM05301080 - Scheme Administrator Pages: Contributions and tax relief: Member contributions - relief at source: Excessive tax relief

Annual claims - excessive income tax given

Annual claims include provision for scheme administrators to pay back income tax claimed and received from HMRC (PSS Nottingham) which is later found not to be due. Part 3 of the claim form APSS 106 asks for details of excess relief and requires a schedule of information to be attached to the claim form. The information needed in the schedule is

• the member’s name,
• the member’s NI number,
• the tax year in which the contributions that do not qualify for relief were paid,
• the gross amount of the contributions that do not qualify for relief,
• the amount of excess relief claimed, and
• a brief description of the circumstances generating the excessive tax relief, e.g. cancellation in a cooling off period, contribution paid exceeds relevant UK earnings

Where an amount shown on an annual claim exceeds the amounts paid on interim claims for that tax year and HMRC (PSS Nottingham) is able to process the claim, they will pay the balance on the 21st of the month following the month in which the form APSS 106 is received.

If, on the other hand, the amounts already paid on interim claims exceed the amount shown on an annual claim, the scheme administrator should send a cheque for the amount of the excess to HMRC. Cheques should be made payable to "Her Majesty’s Revenue and Customs" and crossed "A/c Payee".

The annual claim on form APSS 106 must be made by 5 October (see RPSM05301060). Failure to do so will mean that:

• no further interim claims will be paid for the tax month ending 5 October or later months until the fully completed APSS 106 is received by HMRC (PSS Nottingham),
• HMRC will review the payments made for the tax year for which the form is outstanding and will issue a notice showing the payments made and any lower amount which they consider ought to have been made, and
• if the APSS 106 is not received within 14 days after the issue of that notice, the amount shown in the notice will become immediately recoverable by HMRC.

HMRC (PSS Nottingham) may consider de-registering the registered pension scheme where an annual return on APSS 106 is not made.