Advisers taking on the role of scheme administrators may have less time than they think to complete Accounting for Tax forms.
According to Scottish Equitable because not all parts of Her Majesty’s Revenue and Customs (HMRC) reporting systems are up and running online, people who complete the form by paper may miss the deadline if they don’t act now.
The accounting for tax form has to be completed every quarter by pension scheme administrators if tax is owed on the scheme, and then once the form is completed the tax charge has to be paid.
Although a similar form was used before 6 April, since A-Day the requirements have changed because of the new regime, and the first reporting date for the new system will be 5 July.
However scheme administrators still have 45 days from this date to complete the form and pay the tax, which makes the deadline 14 August, but this, says Rachel Vahey, head of pensions development at Scottish Equitable, is the first real test of how the new reporting regime is working.
As not everything is online yet, Vahey says filling in the form becomes much more complicated if it is done by paper. This is because once the form is filled in, the administrator cannot pay the tax charge until it has received a tax reference number back from HMRC.
Unfortunately processing paper forms and producing these reference numbers can take up to two or three weeks, which means those leaving the paperwork until the last minute could end up missing the deadline.
Vahey says: “Anyone having to fill in one of these forms will need to take two to three weeks off the timescale to make sure they meet the 14 August deadline, otherwise there will be late payment interest. HMRC doesn’t seem like they are going to let people off on this one, and if the paperwork isn’t in on time then the scheme will have to pay the charges.”
Although she admits as the form only applies to schemes where tax is owed, the delay may apply to relatively few people. But she adds “this is the first test for the new regime and reporting, and there is a real chance if people are reporting by paper then they may be late paying tax and have to suffer the additional interest”.
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