Pensions Tax: changes to administration of Relief at Source

04 December 2017

Following the introduction of Scottish income tax changes are being made to assist the administration of relief at source.

Draft regulations have been published which introduce two earlier due dates in respect of the annual return of individual information and the annual claim for repayment. The annual return will also be made a statutory return, removing the need for HMRC to issue a notice for information. A new 30-day timescale for the reporting and repayment of excess relief claimed in an interim claim, along with an interest charge if the reporting and/or repayment is made after the 30-day period will also be introduced.

Geographical extent - applies to all four nations of the United Kingdom

When pension scheme administrators reclaim tax relief using relief at source, the draft regulations require scheme administrators to submit the annual return of individual information within 3 months of the end of the year of assessment. This will ensure HMRC can advise administrators of the correct rate of tax relief to apply to members’ contributions following the introduction of the Scottish rate of income tax.

The draft regulations also require administrators to submit the annual claim within 3 months of the end of the tax year of assessment and will also introduce a process change and interest charge for excess relief claims.

These changes will result in a common filing date (5 July) and will ensure consistency and fairness by encouraging scheme administrators to report and repay excess relief without delay. 

The measure will have effect for the tax year 2017 to 2018 and later tax years. Regulation 3 has effect for interim claims for tax months ending on or after 5 April 2018.

Please send any comments/questions on these draft regulations by email to: pensions.policy@hmrc.gsi.gov.uk by 11:45am on 31 December 2017.

More information is available in the pensions tax: changes to administration of relief at source tax information and impact note.