Pension Schemes - Frequently Asked Questions

 

Self Assessment

Occupational Schemes

Q. As an administrator for a pension scheme do I need to complete a self-assessment tax return?

A. No you are specifically excluded from self-assessment. The self-assessment return must be completed by the trustees.

Usually the Inspector of Taxes will issue a return to the trustees for completion if this is required. Generally this will only be required where the scheme is self-administered. If you are unsure whether or not the scheme is a self-administered one then contact SPSS on 0115 974 1600 quoting the SPSS scheme reference or contact your local Inspector of Taxes.

Q Do insured schemes have to complete self-assessment return forms SA970?

A. At present no, because they are currently not within the self-assessment regime.

Q As a trustee how do I obtain a self-assessment return form SA970?

A. Usually the Inspector of Taxes will issue the return to you. If not, then you should contact the tax office that normally deals with the pension scheme's tax affairs. If that is not known or you have not previously had contact with a tax office you should ring your local tax office. If you provide them with the pension scheme details they will try and locate the correct office for you. If that does not work then if you give them the name of the sponsoring employer and the registered office address they will be able to tell you which office should deal with the scheme. The pension scheme should normally be dealt with in the same office as that dealing with employers corporation tax liability.

Q. If I do need to complete a self-assessment return where can I get advice on completing it?

A. The Inspector of Taxes issues the SA970 return form which deals with the pension scheme's day to day affairs. You should contact the Inspector for assistance in completing the return. Their contact details should be printed on the front of the form.

Q As a pension scheme trustee if a return is not received and I do not chase the Inspector of Taxes up for one will I be liable to a penalty?

A. No, you cannot be charged a penalty for not sending in a return if a notice was never issued to you. The notice is contained on the front page of the return itself.

However, if the trustees have tax liability to report, you have an obligation to notify the Inspector of Taxes of that liability. Failure to notify that tax liability by 5 October following the end of the year of assessment in which the liability arose will render you liable to a tax geared penalty under Section 7 Taxes Management Act 1970.

Q Can I file the pension scheme self-assessment by the Internet?

A. You can download the return form SA970 and the notes from the Internet but at present we do not have facilities to enable the completed return to be filed by the Internet. This will be reviewed in due course but one of the factors to consider is the likely demand for the service.

Q Why does the pension scheme have to complete a self-assessment when there is no tax liability?

A. Each year the Inland Revenue gives tax relief of over £11 billion excluding relief on Capital Gains Tax. We have a duty to monitor that relief to ensure it is given correctly. The tax return and accounts enable us to do that.

Q What power does the Inland Revenue have to issue a notice requiring completion of a return and supporting accounts etc?

A. The legislation providing this power is S8A (1) (a) and (b) Taxes Management Act 1970.

Q When does question 4 on the self-assessment return form SA970 apply to me?

A. You should tick yes here if the scheme is an insured scheme but it holds some cash on deposit which has not yet been put into 'insurance business'. You then need to report the amount of interest received on those deposits in question 5 or 6 whichever is appropriate. Then the only other questions you will need to answer are questions 15 to 23 inclusive.

Q Do I enter the dividend plus the tax credit at Question 7 on the self-assessment return form SA970?

A. No. You are only required to enter the dividend as this is the amount of income received by the scheme as the tax credit is no longer reclaimable.

Q Do I enter income at question 14 for which I cannot find a box elsewhere on the return?

A. Only if it is taxable income. This box is designed for the return of taxable income not required elsewhere on the return.

The kind of thing you would not enter here is contributions received by the scheme or anything that would not be taxable. These items will appear in the accounts which form part of the return.

Q What happens if the pension scheme changes its accounting year end when they have been completing the SA return on the account basis?

A. The completion of the SA return on the accounts basis was an easement. This was given on the understanding that if the scheme changed its accounting year end it would revert to the strict fiscal basis. Once there has been a change of account date the strict fiscal basis applies in the future.

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