HM Revenue and Customers (HMRC) has delayed the requirement for online scheme reporting for six months after A-Day as the full service will not be completely operational until 2007.
In the latest Pensions Tax Simplification newsletter the HMRC states that while most scheme administrators will be able to carry out their legislative requirements online from A-Day, the exception will be for the small number of schemes that wind up and have to file a report within three months. The postponement of the online requirement aims to offer these schemes flexibility by allowing the filing of reports, returns and registrations of new schemes by paper for a period of at least six months after A-Day.
The delay has been announced following a review of the progress being made on the development of the Pensions Schemes Online, which resulted in a decision to reduce the service available in April 2006, and plan to add the remaining facilities in a series of stages over the following year.
In April the service will provide for online registration of a pension scheme for tax relief purposes and aims to allow scheme administrators and practitioners to carry out pre-registration, registration, authorisation and maintenance of scheme administrator and practitioner details.
Later additions will include online filing of accounting for tax returns, event reports and other information. The newsletter states the remaining functions of Pensions Schemes Online, including the online submission of the pension scheme return, will take until April 2007 to be available.
Ivan Lewis, the Economic Secretary to the Treasury, says in a written statement that pension scheme administrators and practitioners will be able to meet most of their statutory filing requirements online at the time they are required, but paper returns and reporting will also be offered as a supplementary means of filing for a limited period.
He adds the HMRC will be holding discussions with the pensions industry and software suppliers to establish what issues this delay might present and how best to address them before moving to a mandatory online filing regime. He also says the delay will not affect the HMRC’s ability to deliver on Pensions Tax Simplification, and that the vast majority of pension schemes and members will also not be affected by the delay.
Rachel Vahey, pensions development manager at Scottish Equitable, says the Revenue and the industry are not yet in a position to go live with the new on-line reporting, particularly as development is still needed to make sure pension schemes' back office systems are capable of 'talking to' the HMRC's systems, to allow information to be reported.
She adds: “We welcome the delay. This is a massive change in administration for the Revenue and for the industry and it is important that we get it right. At the moment the Revenue is simply not ready. However, it does not mean that reporting does not need to be done. The scheme administrator for all types of pension scheme will still have to report to the Revenue from April 2006 under the new reporting requirements of the tax regime.”
Alasdair Buchanan, group head of communications for Scottish Life, agreed the delay was a good thing.
He says: “The delay seems entirely sensible, as there seems to be a considerable degree of administration overload on all sides. It could be seen as an early christmas present for scheme administrators, although the Revenue is also probably quite pleased to have some extra time to ensure that everything is in place.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected].IFAonline
Cautious, Balanced & Dynamic Growth
Cowardly, boring or sensible
Latest news and analysis
‘Most significant’ upgrade since launch
Changes happening over coming months