Pensions Tax Simplification Newsletter 32

31 December 2007

Contents

Introduction

Welcome to the thirty second edition of the Newsletter. This edition contains a number of reminders around end of year filing as well as updates on a number of issues.

Please can you pass this Newsletter on to anyone else in your organisation who you think may find it useful.

Interim arrangements for changes announced at PBR 07

We have recently published guidance for pension scheme administrators on the practical effects of the pension scheme changes announced in the Pre Budget Report in October 2007.

Regulations Update

The following regulations relating to pension schemes have recently been laid;

The Registered Pension Schemes (Authorised Member Payments) Regulations 2007 (SI3532)

These Regulations provide for an additional category of payment to be an authorised member payment. The payments in question are those made to with-profit policyholders as part of a scheme which makes a reattribution of the inherited estate associated with the with-profits fund.

The Registered Pension Schemes (Meaning of Pension Commencement Lump Sum) (Amendment) Regulations 2007 (SI3533)

Rules relating to what is a Pension Commencement Lump Sum were changed by Finance Act 2007 and this Regulation amends SI2006/135 to take into account minor consequential changes.

The Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations 2007 (SI3537)

These Regulations list the non-cash benefits provided by employers to their retired former employees and their families which are to be excluded from taxation. The exclusions will be backdated to apply with effect from 6 April 2006.

Correction to Newsletter No 31

Unfortunately there was an error in Newsletter No 31 when it was originally published. Under the information about the Pre Budget Report, in the section 'Inheriting Tax Relieved Pension Savings', in the third paragraph it stated that 'this is not to apply where the scheme has less than 20 members', this should of course have said 'this is not to apply where the scheme has more than 19 members'.

The original version was amended as quickly as possible but if you printed off a copy as soon as it was published, your version may contain this error. We apologise for any confusion caused by this.

E-filing for registered pension schemes - a reminder

We are reminding pension scheme administrators (or practitioners acting on their behalf) that if they need to and haven't already done so, they should register to use Pension Schemes Online as soon as possible.

Early registration will ensure you are ready to use Pension Schemes Online in advance of the 31 January filing deadlines for the Event Report and Registered Pension Scheme Returns, particularly as the HMRC online services are extremely busy throughout this month.

Since 16 October 2007, it is mandatory for pension scheme administrators to submit certain information reports and returns electronically to HMRC. To coincide with the introduction of mandatory electronic filing we published Newsletter No 30 on 12 October that provided information on what does and does not have to be filed electronically in the prescribed format, as well as some other items we hope you have found useful over the last few months.

To submit information online, scheme administrators (or practitioners acting on their behalf) must register with HMRC's Pension Schemes Online service, by visiting HMRC's online registration page and selecting 'Pensions'. It can take up to seven working days to activate a new account as some information has to be sent by post so we are urging those who haven't registered to do so urgently.

A guide for using Pensions Schemes Online is available on the HMRC website. Further information on the online services offered by HMRC is available from the Online Services helpline on 0845 6 055 999.

Any paper versions of the e-mandated information submitted after 15 October will be returned to the sender and deemed as not received, which could result in a penalty if an online return is not subsequently filed, or is filed late.

Forthcoming filing deadlines

Form / Return Filing Deadlines
Pension Scheme Return (only if you have been issued with a notice to file)
Event Report
SA970 Self Assessment Return for Trustees of Registered Pension Schemes (paper only) (not all schemes need to file this return)
31 January 2008
AFT for Quarter 3 – 1 October to 31 December
 14 February 2008
AFT for Quarter 4 – 1 January to 31 March 15 May 2008

Registered Pension Scheme Return reminders

We have recently sent out reminders to current scheme administrators that are required to but have not yet filed a Registered Pension Scheme Return. If you are the current scheme administrator but have not received a reminder it is still your responsibility to file the Pension Scheme Return.

If you have received a notice or a reminder to file a Registered Pension Scheme Return and you are no longer the scheme administrator then you are not required to file the return. This is the responsibility of the current scheme administrator.

Ensuring you have submitted your Event Report

We are aware that there are some scheme administrators and practitioners who believe they have filed their completed Event Reports to this office electronically, but who have not actually done so.

This is because, although they have saved the Event Report on the online system and the completed Event Report is visible to them on Pension Schemes Online, they have not submitted the completed report to HMRC. Until this final stage is done, HMRC will not receive the Event Report and in fact the details entered can not be accessed by HMRC. If this is the case, the Event Report will not have been filed correctly which may result in penalties if it is not filed before the 31 January 08 deadline.

The correct procedure for submitting an Event Report is as follows:

Once all the relevant details have been entered on the report you need to return to the 'Event Report - Summary' screen where there are four options: 'Submit this Event Report', Save & exit this Event Report', 'Delete this Event Report' and 'Exit without saving'.

If there are no further details to enter on the Event Report then 'Submit this Event Report' should be selected. The screen will refresh itself until a 'Submission Successful' screen is displayed. This process should only take a few minutes.

SA970 Pension Scheme SA Returns

We have been reminding scheme administrators and practitioners about e-mandation and the need to submit APSS forms through the on-line service. However, you should remember that you cannot submit the SA970 Tax Return for the Trustees of Registered Pension Schemes electronically. This return can only be submitted in paper form. For details of which schemes need to submit the SA970 please see the article in Newsletter 25.

Returns should be sent to PSS, Yorke House, Castle Meadow Road, Nottingham, NG2 1BG and should be received by 31 January 2008.

The Pensions Regulator Scheme Return

The Pensions Regulator is the UK regulator of work-based pension schemes. From December 2007, the Regulator will be issuing their scheme return notices to all registered occupational schemes by post, asking scheme trustees to register to use their new online system called Exchange. This return is different to, and should not be confused with, the Pension Scheme Return which you may have received a notice to file from HMRC.

More information on The Pensions Regulator scheme return and their new online system can be found on The Pension Regulator's website along with some Frequently Asked Questions they have produced.

Pension Schemes - Surplus Avoidance Device

We have recently published guidance on the tax implications for Scheme Administrators of entering into an avoidance device that seeks to take advantage of a combination of rules within the pensions tax legislation to allow a member of a registered pension scheme to extract the funds from their pension scheme tax-free.

RPSM

The latest update to the Registered Pension Schemes Manual was published on 4 December 2007 and contains guidance on legislation in Finance Act 2007. The guidance was developed with support from the Joint Working Group (JWG). We are grateful for the work that JWG members put in, often at short notice. The guidance should be clearer and easier to use as a result of their help.

As part of the HMRC response to the Review of Links with Large Business we will aim in future to develop significant guidance on planned legislation in collaboration with stakeholders and to publish draft guidance alongside the Finance Bill. Our aim is to develop guidance that is clearer and more helpful. If you would like to take part in that collaboration please contact Alan Welsby.

Contact Us

If you have any questions about anything to do with new tax rules and you can't find the answer in the Registered Pension Schemes Manual, please contact us by e-mail or phone our helpline number 0115 974 1600 (9.00 to 17.00 Monday to Friday) or you can write to us at:

Pension Schemes Services (PSS)
Yorke House
Castle Meadow Road
Nottingham
NG2 1BG