04 July 2023

HM Revenue and Customs (HMRC) has published the ‘Pension schemes newsletter 151 — June 2023’. The newsletter is published by HMRC’s pension schemes services to update stakeholders on the latest news for pension schemes.

Here are some of the key highlights:

  • annual allowance (AA) calculator – this is now available to use and been updated to reflect the increase to the AA, adjusted income and money purchase annual allowance for 2023/24
  • abolition of the lifetime allowance (LA) – feedback received on the impact on the payment of stand-alone lump sums (SALS) has been taken onboard. The government has amended the Finance (No. 2) Bill to make clear that any amount of a SALS in excess of the 5 April 2023 maximum, may still be paid to the member as a SALS. Where there is an excess, this is subject to the member’s marginal rate of income tax
    • lump sum taxation: where one of these lump sums are identified, normal PAYE rules will apply where there is 5 April 2023 maximum excess. If the member has a P45 in the current tax year from a previous source or employment and it’s dated on or after 6 April 2023, the code on the P45 on a month 1 basis should be operated and the tax from the excess amount should be deducted. In all other circumstances, including where the member has a P45 from the previous tax year, the emergency tax code for 2023/24 on a month 1 basis should be used against the payment and the tax should be deducted from the excess amount. As these lump sums will be a one-off payment a P45 needs to be issued to the recipient
    • lump sum reporting: tax deducted must be reported and paid through payroll. Until changes can be made to the Real Time Information (RTI) programme to identify these separately, some existing data items from 6 April 2023 need to be used. A table has been illustrated to show what to enter for the different data items
    • payroll systems should be updated by no later than 30 September 2023. Until systems are updated, the tax should be deducted using the current year P45 for the member, or using the emergency tax code, on a month 1 basis. Once systems are updated, tax deducted from payments from 6 April 2023 onwards must all be reported and paid, issuing any outstanding P45s
  • managing pension schemes service - take action to migrate your pension schemes from the pension schemes online service to the managing pension schemes service now
    • event report: the event report functionality for 2023/24, on the managing pension schemes service will be released this summer. Submission for a new event report or amending an existing event report for 2022/23 or earlier, can be done on the pension schemes online service
    • filing Accounting for Tax (AFT) returns: 14 August 2023 is the deadline for returns for the quarter 1 April 2023 to 30 June 2023
    • pension scheme return: from April 2024, pension scheme returns for the tax year ending 5 April 2024 must be submitted on the managing pension scheme service, instead of using the pensions scheme online service
    • if you have migrated your scheme before April 2024, you’ll receive a notice to file a pension scheme return, with a filing deadline of 31 January 2025. But if you migrate your pension scheme after 31 October 2024, notices to file for the tax year 2023/24 will have a filing deadline of three months from the date of issue. If you delay migrating your schemes further, notices to file for any applicable years will automatically be issued and backdated to the tax year 2023/24
    • if no pension scheme return is received by the specified filing deadline, a £100 penalty will be charged. Daily penalties of up to £60 may also apply if the return is still not submitted. You can find more information on reporting to HMRC.

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