188ÌåÓý

This appendix sets out the reporting requirements for the new recovery procedures in relation to changes to unauthorised payments charges and scheme sanction charges arising from the remedy. Recovery includes both offsetting and reclaiming of unauthorised payments charges or scheme sanction charges. It follows on from the guidance published in Appendix B to the Public service pensions remedy newsletter � September 2024.

Recovering and reporting unauthorised payments charges (including offsetting) under the mandating procedure

As part of the Public service pensions remedy newsletter � September 2024, HMRC published detail on how public service pension schemes will operate the new process of offsetting overpayments of unauthorised payments charges against further charges and reclaiming any remaining overpayment.

This newsletter provides further guidance on the reporting requirements which will apply once the regulations are in place.

We’ll publish full guidance covering the information on these processes on 188ÌåÓý in due course.

Reporting requirements � actions for scheme administrators

The new separate reporting requirements will apply if:

• the scheme administrator has operated the offsetting procedure, as set out in the September 2024 newsletter
• the scheme administrator has overpaid the members unauthorised payments charge or scheme sanction charge as a result of the remedy and there is no top-up unauthorised payment
• there is a top-up unauthorised payment on which the scheme administrator will pay the unauthorised payments charge and scheme sanction charge

Where these situations arise, the new reporting process will remove the requirements for:

• scheme administrators to amend the original event report containing the original unauthorised payment
• scheme administrators to submit an event report in respect of top-up unauthorised payment
• scheme administrators to obtain agreement from members to pay the unauthorised payments charge on their behalf
• members to amend Self Assessment returns
• members to submit a Self Assessment return in relation to an unauthorised payments charge on a top-up unauthorised payment, which the scheme administrator will pay

Instead, under the new reporting process the scheme administrator must make a return to report the top-up unauthorised payment and to recover any overpaid unauthorised payments charge or scheme sanction charges. A return in the form of a Microsoft Excel template containing the relevant information is available to support scheme administrators in making this report. If you have not received a copy, contact your single point of contact.

When the information becomes due

The new separate reporting requirement will be a stand-alone report made using the Secure Data Exchange Service (SDES). Scheme administrators will be required to report on a quarterly basis, in relation to the quarter in which the top-up unauthorised payment is made.

The quarters are:

• 1 January to 31 March
• 1 April to 30 June
• 1 July to 30 September
• 1 October to 31 December

Scheme administrators will have 45 days from the end of the quarter in which the top-up unauthorised payment is made to file the relevant information. So, for tax charges arising due to payments in the period:

• 1 January to 31 March, the return of information should be filed no later than 15 May
• 1 April to 30 June, the return of information should be filed no later than 14 August
• 1 July to 30 September, the return of information should be filed no later than 14 November
• 1 October to 31 December, the return of information should be filed no later than 14 February
• before 24 April 2025 when the regulations come into force, the return of information should be filed no later than 14 August 2025

Where no top-up unauthorised payment is made scheme administrators have until 31 January 2031 to make a return to reclaim overpaid unauthorised payment charge or scheme sanction charge on a historic unauthorised payment.

How to file the information

The relevant scheme administrator should send the return of information on the return to HMRC, using the SDES, within the prescribed deadlines as set out in the previous section of this appendix.

Information needed

Every return of information must include the following details for each individual included in the return.

Details of the pensions scheme

The pension scheme name and Pension Scheme Tax Reference (PSTR) number.

Scheme administrator’s details

The scheme administrator’s name and identity number and, if the return is reclaiming payment of an excess amount or interest, bank details.

Individual’s details

The individual’s name and National Insurance number. If the individual does not qualify for a National Insurance number, the alternative number provided by HMRC after the scheme administrator has given HMRC the individual’s date of birth and address.

Details of the historic payment

This includes:

• the date of payment
• the amount of the of the historic payment that was an unauthorised member payment and the amount that was subject to the scheme sanction charge
• the tax year in which the historic payment was included within an event report
• as a result of the remedy, the revised amount that was an unauthorised member payment and the revised amount that was subject to the scheme sanction charge â€� further details will be needed where recovery of overpaid tax is being claimed

Declarations

Declarations on the accuracy of the information, understanding of the consequences of providing false information, where reclaiming, confirmation of not claiming elsewhere and specific declarations in relation to top-up payments where one is not included in the claim.

Where a top-up unauthorised payment is made, the return must include the following details relating to the top-up payment:

• nature, payment date and amount of the payment before any tax deduction
• the amount of unauthorised payments charge due
• the amount that is subject to the scheme sanction charge, and the amount of scheme sanction charge due
• the amount that was paid to the member after the required tax deduction

Where the return is seeking to recover overpaid tax, either by offsetting or a claim for repayment, the return must include further details relating to the historic payment and details of the amount of unauthorised payments charge or scheme sanction charge being recovered.

Further details of the historic payment

This includes:

• the amount of the unauthorised payments charge paid, date it was paid to HMRC and the charge reference
• the revised amount of the unauthorised payments charge and the amount of the overpaid unauthorised payments charge
• the amount of the scheme sanction charge paid, date it was paid to HMRC and the charge reference
• the revised amount of the scheme sanction charge and the amount of the overpaid scheme sanction charge

Details of the excess amount for the unauthorised payments charge

This includes:

• the excess individual amount â€� that is the amount of the overpaid unauthorised payments charge in respect of the historic payment
• the amount of excess individual amount being offset
• the amount of excess individual amount being reclaimed
• where a top-up unauthorised payment has been made in respect of the individual, the amount of repayment interest due in respect of the excess individual amount
• where the historic payment was made on or after 6 April 2019, the amount of repayment interest, if any, that exceeds the total of the new unauthorised payments charge minus the excess individual amount
• where a reclaim is being made in respect of a top-up unauthorised payment but that top-up payment was reported on an earlier return, the date of that earlier return, the reason why the offsetting process could not be used in respect of the top-up payment and why the reclaim is now being made
• where part or all of the excess individual amount is being offset, the individual calculation result â€� that is, the amount of the scheme administrator’s liability to the unauthorised payments charge in respect of the top-up unauthorised payment, less the total of the excess individual amount plus repayment interest in respect of the excess individual amount

Details of the excess amount for the scheme sanction charge

This includes:

• the excess scheme amount â€� that is the amount of the overpaid scheme sanction charge in respect of the historic payment
• the amount of excess scheme amount being offset
• the amount of excess scheme amount being reclaimed
• where a top-up unauthorised payment has been made in respect of the individual, the amount of repayment interest due in respect of the excess scheme amount where the historic payment was made on or after 6 April 2019. This is the amount of repayment interest, if any, that exceeds the new scheme sanction charge minus the excess scheme amount
• where part or all of the excess scheme amount is being offset, scheme administrator calculation result â€� that is the amount of the scheme administrator’s liability to the scheme sanction charge in respect of the top-up unauthorised payment, less the total of the excess scheme plus repayment interest in respect of that amount

Where a top-up payment is made

Where a top-up payment is made the scheme administrator will be jointly and severally liable with the member for the unauthorised payments charge.

HMRC will check the information provided in the return and raise an assessment on the scheme administrator for the unauthorised payments charge and the scheme sanction charge. They will also confirm the amount of overpaid tax and repayment interest that HMRC considers may be recovered and offset against the new tax charges. The net result will be that the scheme administrator will pay to HMRC only the additional amount of tax that HMRC considers is due after offsetting.

The scheme administrator will have 30 days from the date of the assessment to pay the tax. If the tax charge is not paid by this point, interest and penalties may apply.

Where a repayment of tax is due

The scheme administrator will be able to use the return to apply for a repayment of the overpaid tax where, as a result of the remedy, the scheme administrator calculates that they previously overpaid the original unauthorised payments charge or scheme sanction charge, and either:

• no top-up unauthorised payment will be made in respect of the member
• the amount of overpaid tax is more than the tax due in respect of the top-up payment and so cannot be fully offset against the new tax charge

HMRC will consider the repayment application and either accept the claim in full, accept part of the claim or reject the claim within 90 days from the date the information was submitted using the SDES.