RPSM07108010 - Technical Pages: Investments: Tax charges: Unauthorised payments charge

Unauthorised payments charge

Where an unauthorised payment is made to a member or an employer in relation to scheme investments mentioned in this chapter, the tax charge will be 40% of the amount of the unauthorised payment.

The person liable to the charge will be

• in the case of an unauthorised member payment - the member to or in respect of whom the payment is made. The member should declare the amount of the unauthorised payment to the tax office dealing with his/her tax affairs.
• in the case of an unauthorised member payment made where the member has died – the recipient. The recipient should declare the amount of the unauthorised payment to their own tax office.
• in the case of an unauthorised employer payment – the sponsoring employer to whom or in respect of whom the payment is made.

The Registered Pension Schemes (Provision of Information) Regulations – not yet laid - require the registered pension scheme to report any unauthorised payments made to or in respect of scheme members or sponsoring employers.

Further guidance covering unauthorised payments can be found at RPSM04104020.