Serious ill-health lump sums and RTI reporting
06 December 2016
An update from HMRC’s Software Developers Support Team explains there will be a delay to the RTI specifications for 2017-18 to include a new data item to identify serious ill-health lump sum payments to individuals over 75. The update reads:
In Pension Schemes Newsletter 81, we explained that the tax treatment of serious ill-health lump sums changed on 16 September 2016 following Royal Assent.
HMRC are currently working on updating the RTI specifications for 2017/18 to include a new data item to identify serious ill-health lump sum payments to individuals over 75.
We said in Newsletter 81 that updated specifications were due to be provided in December 2016. Unfortunately we won't be able to publish these, or release updated test services, until early in 2017. We are sorry for any inconvenience caused by this further delay.
We are aware that this delay may cause problems in designing, developing and testing your software to be able to report these payments on the FPS message. To help with this, whilst it is still mandatory that your customer report serious ill-health lumps sum payments, it will not be mandatory to identify these payments using the pensions data fields until 6 October 2017.
In the meantime pension scheme administrators that need to report payments of serious ill-health lump sums to HMRC should continue to follow the guidance in the Pension Schemes Newsletter 81.