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EPN 469 – Pensions Tax Update

Audience:

  • Pensions Leads
  • HR Managers

Action:

  • To note the update on provision of Pension Savings Statements
  • For civil service employers, ensure that you have given members the opportunity to attend guidance sessions if they have received a Pension Savings Statement 

Timing:

  • Immediate

Detail:

1. You should be aware that a letter has been sent to HR Directors to provide an update on the Pension Savings Statement process and to remind employers of the timetable. 

Pension Savings Statements – timing 

2. MyCSP have now issued the Pension Savings Statements. A total of 3,923 Pension Savings Statements (PSS) have been sent out to members who have:

   a) Breached the Annual Allowance in 2015/16 (2,976 statements issued to this group); or

   b) Earn over £100,000 (736); or

   c) Requested a statement (211) 

3. You or the pensions lead within your area should have received a list of members who were sent a statement (please note that if you do not have any members who received a PSS you will not have received a list).

Support available to members

4. As you will be aware from previous communications, support materials are available on the Civil Service Pensions website at http://www.civilservicepensionscheme.org.uk/members/pensions-and-tax/helpful-guides/, specifically an online guide to the statement. 

5. If members believe that any details on their statement are incorrect, or that they haven’t received a Pension Savings Statement but should have received one, please ask the member to contact the scheme administrator at SCU@mycsp.co.uk, who can check and confirm pension input details. Alternatively there are some direct numbers members can call which I have included at the end of this notice. 

6. Civil Servants, who receive a Pension Savings Statement, should have the opportunity to attend a group pensions and tax seminar, which will be funded by the Civil Service Employers. If you have members who received a Pension Savings Statement and wish to attend a group seminar then you should look to arrange pension tax guidance sessions as soon as possible, given the tight Scheme Pays deadlines (set out below).  

7. To book sessions for your staff you should complete a Tax Support Enquiry Form which you can find on the Civil Service Pensions website here: http://www.civilservicepensionscheme.org.uk/members/pensions-and-tax/faqs-help-support/ and send it to Taxsupport@mycsp.co.uk. Alternatively you can call the Tax Support booking number 01903 273781. 

Action and timetable for members 

8. You will also be aware that members who receive a Pension Savings Statement will need to firstly work out whether they have a tax charge to pay and, if so, determine how to pay that charge.  Members can either pay their tax directly to HMRC via self assessment or can opt for the charge to be taken out of their pension (called “Scheme Pays”). You should be aware that a large proportion of members will not have any tax charge to pay, because of the carry forward allowances from the previous three tax years, but will need to engage with the process nonetheless in order to be sure they have nothing to pay. If there is nothing to pay then this is the end of the process and there is no need for the member to inform HMRC of anything. 

9. Members may also need to obtain Pension Savings Statements from other pension arrangements they have outside of the Civil Service pension scheme (classic, classic plus, premium, nuvos & alpha), to determine if they have a tax charge to pay. This will be the member’s individual responsibility. 

10. If members have calculated that they have a tax charge to pay, then (in the majority of cases) they will need to have made that payment by 31 January 2017 or may be liable for a late payment penalty charge levied by HMRC. This is a HMRC requirement and not a scheme decision. To meet a 31 January deadline, members need to request a Scheme Pays quote from MyCSP by 9 November to ensure that they do not have a tax penalty for late payment. A ‘What to expect guide’ sets out these deadline dates and can be found at http://www.civilservicepensionscheme.org.uk/members/what-to-expect/when-youre-applying-for-voluntary-scheme-pays/ 

11. Many members will not be aware of the different deadlines that apply this year. Previously members had until 31 July to complete the Scheme Pays process. It is important that affected staff appreciate the urgency and tighter deadlines which apply this year. Please note that a letter will be sent to all members by end October to remind them of the deadlines for using Scheme Pays (this will be sent to all members who received a Pension Savings Statement). 

Support and action for employers 

12. This note is primarily for information and to serve as a timely reminder for employers. Depending on what contact you have already made with those staff affected, you may wish to:

  • Arrange tax seminars for members (if you have not already done so). You or the your pension lead has been sent a list of members who have received Pension Savings Statements (unless you have no members who received a Pension Savings Statement). If you have not received a list but think you should have received one, please engage with your usual MyCSP contact.
  • Remind those members that have received a Pension Savings Statement that they should engage with the process and work out whether they have a tax charge to pay;
  • Ensure members approach MyCSP (rather than you) with any pension tax queries, using the e-mail address SCU@mycsp.co.uk or the telephone numbers at the end of this notice;
  • Remind members that if they have a tax charge to pay, they will probably need to calculate this tax liability and inform the scheme by 9 November if they wish to use Scheme Pays to make the tax payment by the 31 January deadline. 

13. If you have any questions or require any further assistance, please contact Kevin.Hughes@cabinetoffice.gov.uk or Sally.Rowles@cabinetoffice.gov.uk 

14. The Contact telephone number for members regarding Pension Savings Statements, depending on first letter of surname: 

A – C: 01903 876 946

D – G: 01903 835 731

H – J: 01903 760 075

K – N: 01903 835 742

O – Q: 01903 760 317

R – T: 01903 760 191                                                       

U – Z: 01903 876 929