RPSM12301330 - Scheme Administrator Pages: Information Requirements and Administration: Information the scheme administrator is required to give to HMRC: The Accounting for Tax Return: Payment of the tax due
Payment of tax reported on the accounting for tax (AFT) and what happens if the tax is paid late
When is payment due?
Who is responsible for paying the tax?
Can a practitioner pay the tax on behalf of the scheme administrator?
How to pay the tax due
Who to contact if you have a question about a payment
AFT return filed but tax not paid
Interest on late payments
Penalties on late payment
[s254] [Reg. 4 The Registered Pension Schemes and Overseas Pension Schemes (Electronic Communication of Returns and Information) Regulations 2006 - SI 2006/570]
When is payment due?
Payment of the
- Short service refund lump sum charge,
- The lifetime allowance charge,
- The special lump sum death benefits charge,
- The serious ill-health lump sum charge (applying from 6 April 2011),
- The authorised surplus payments charge, and
- The de-registration charge
is due 45 days after the end of the quarter in which the event triggering the tax charge take place. This tax payment date is the same as the AFT filing date. The tax due is payable without the need for HMRC to issue an assessment for the tax due.
Who is responsible for paying the tax?
The same person who is responsible for filing the AFT return is responsible for paying the tax due. This will usually be the scheme administrator. See RPSM12301310 for details of who is responsible for filing the AFT return.
Can a practitioner pay the tax on behalf of the scheme administrator?
Yes, anyone can pay the tax due with the AFT return on behalf of the scheme administrator.
How to pay the tax due
There are a number of ways in which you can pay HMRC. Guidance on how to make payments to HMRC can be found on the HMRC website, follow the quick link ‘paying HMRC’ on the left hand side of the HMRC home page (www.hmrc.gov.uk) and then the link ‘pension scheme payments for administrators’.
When making the tax payment the scheme administrator should include the charge reference number. This enables HMRC to match the payment to the AFT return. If payment is made without quoting the charge reference the scheme administrator may get payment reminders and assessments because HMRC has not been able to match the tax payment to the AFT return.
The charge reference (also sometimes called a payment reference) is given when the AFT return has been successfully submitted. It is made up of three letters beginning with X, followed by 11 numbers.
The charge reference is shown on the ‘Submission Successful’ screen within the paragraph of text. You should take a note of this number as you will need it when making the tax payment.
If you have not taken note of the charge reference and have cleared the ‘Submission Successful’ screen, you will have to wait 24 hours from the submission before you will be able to view the charge reference.
To view the charge reference, select ‘Accounting for Tax’ from the ‘Pension Scheme Summary’ page. The charge reference will appear in the overview section.
Who to contact if you have a question about a payment
If you have a question about a payment you should contact HMRC Accounts Office, Shipley.
HM Revenue & Customs
Bradford
BD98 1YY
01274 539665
AFT return filed but tax not paid
Where the AFT return has been filed but tax has not been paid a payment reminder will be issued to the scheme administrator. This payment reminder will be issued
- seven days after the payment due date where the AFT return was filed on time, or
- seven days after the AFT return was filed if it was not filed on time.
The amount shown on the payment reminder will be the amount of tax outstanding plus interest for late payment.
If the tax continues to be unpaid HMRC will raise an assessment to collect the tax and interest due.
HMRC needs the charge reference with the tax payment to match up the tax payment with the scheme administrator’s AFT return. If a payment is made without quoting the charge reference payment reminders and assessments can be issued even though the tax has been paid.
Interest on late payments
Interest is charged on any tax paid late. The HMRC website has details of the interest rate for late payment. Follow the quick link ‘rates and tables on the left hand side of the HMRC home page (www.hmrc.gov.uk), then ‘departmental interest rates’ and then ‘late payments’.
Penalties on late payment
[Schedule 56 FA 2009][The Finance Act 2009, Schedule 56 (Appointed Day and Consequential Provisions) Order 2010 - SI 2010/466]
Penalties are due for late payment of tax charges listed above due on or after 14 October 2010. That is tax charges that arise in the quarter ending 30 September 2010 and any subsequent quarter. Penalties for late payment do not kick in until the tax payment is over 30 days late. Penalties are due in addition to interest for late payment.
Where the tax is paid over 30 days from the due date the penalty is 5% of the unpaid tax 30 days after the due date.
Where tax has still not been paid six months after the due payment date a further penalty is due. This is 5% of the tax outstanding at the six month point.
Where tax is still not paid 12 months after the due payment date a further penalty of 5% of the outstanding tax is due.
So if, for example, tax of £2,500 was due to be paid on 15 May 2011 but is not paid until 20 November 2011 the following penalty for late payment would be £250 made up of
- £125 penalty (5% of the £2,500 tax due) because the tax payment is more than 30 days late, and
- Another £125 penalty (5% of the £2,500 tax due) because the tax payment is more than 6 months late.
| [Para 9 Schedule 56 FA 09] |
HMRC has the ability to reduce a penalty for late filing or for late payment of tax. But this can only be done if there are special circumstances. HMRC will consider if a penalty should be reduced on the facts of each case, as they arise (not beforehand). However the following will not be considered ‘special circumstances’.
- The inability of the scheme administrator to pay
- The fact that the loss of tax from one taxpayer is balanced by tax from another taxpayer
- The fact that penalties arise due to both late filing of the AFT and late payment of the tax due.
| Glossary (RPSM20000000) |
