About the Accounting for Tax (AFT) return

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What is the Accounting for Tax (AFT) return?

The Accounting for Tax return is a return that is required by law from 6th April 2006. Scheme Administrators of all registered pension schemes are required to make an AFT return to HMRC if they have any liability to one or more of five particular tax charges. See ‘Tax Charges’ for further information on these charges.

The AFT return can be submitted online or, at present, on paper. In due course it will be mandatory to submit any required AFT online.

When is the Accounting for Tax (AFT) return due?

The Accounting for Tax return is a quarterly return.

The AFT return should be made for any quarter in which tax is due. The quarters are the 3 months ending 31st March, 30th June, 30th September and 31st December

You do not need to make an AFT return if there is no tax due for a quarter.

The return must be made within 45 days after the end of the quarter for which it is due. For example the AFT return for the quarter ending 30th September must be submitted within 45 days of this date, which would be 14th November.

It is never advisable to leave it until the last minute in case there are problems with your form and it is rejected. If it is rejected then you run the risk of not getting it submitted in time for the filing deadline and then incurring late filing penalties.

Who is responsible for the Accounting for Tax (AFT) return?

The Scheme Administrator is required to make the Accounting for Tax return. They are also responsible for its accuracy and completeness.

Can the Scheme Administrator delegate responsibility for the Accounting for Tax (AFT) return?

No. However, the Scheme Administrator can choose to employ a practitioner to complete and submit the return on their behalf but the Scheme Administrator must have seen and approved its content before it is submitted to HMRC as any penalties for submitting an incomplete or inaccurate Accounting for Tax return are chargeable on the Scheme Administrator(s).

If the AFT return is filed online by the Practitioner on behalf of the Scheme Administrator then they will be required to make a declaration before the submission can be accepted by HMRC. This declaration is simply to confirm that the Scheme Administrator named in the submission has approved the content of the return/report, and its submission to HMRC online.

If the AFT return is submitted on paper, the AFT return must be signed by the Scheme Administrator.

What are the penalties if an Accounting for Tax (AFT) return is due and it is not submitted on time?

Where an Accounting for Tax return is not submitted on time or it is incorrect, penalties which are set out in legislation will apply.

The penalties that may be applied are:

1. Where the number of persons whose particulars should be included in the return is 10 or less, a penalty of £100 for each quarter, or part quarter from when the return was due will apply, up to and including the fourth quarter.

2. Where the number of persons whose particulars should be included in the return is more than 10, a penalty of £100 for each 10 persons or part thereof (for example, 25 persons = £300 penalty) for each quarter or part quarter from when the return was due will apply, up to and including the fourth quarter.

3. From the fifth quarter, regardless of the number of persons whose particulars should be included in the return, a penalty not exceeding the amount of income tax for the quarter that the return was not made will apply (excluding any scheme sanction charge).

For example, the AFT return for the second quarter ending 30th September is due by 14th November. If a return was submitted on 6th January the following year, this would result in a penalty applied for two quarters, the first quarter being the full quarter up to 31st December, and the second being a part quarter up to 31st March.

Where can I find further information in the Registered Pension Schemes Manual?

Further information about the Accounting for Tax return, can be found in the Scheme Administrator pages of the RPSM at RPSM12301300 onwards.