Residency status of pension scheme members for relief at source
08 May 2018
HMRC has updated guidance to provide clarification for administrators that when they use relief at source to reclaim tax relief given to pension scheme members, they are required to tell HMRC about how many repayment claims are for Scottish and rUK rate taxpayers and the amounts for each.
Excerpt from the updated guidance:
“Use the correct residency status of your members for relief at source
As part of your interim and annual repayments claims for relief at source, you must tell HMRC:
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The numbers of UK and Scottish rate taxpayers
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As separate amounts, how much you’re reclaiming for UK and Scottish rate taxpayers
For your scheme members who are Scottish taxpayers liable to income tax at no more than the Scottish starter rate of 19%, or who pay no tax, you’ll continue to claim relief at 20% for these individuals. HMRC will not recover the difference between the Scottish starter and Scottish basic rates and you must not give relief at 19% to these members.
Your scheme members who are Scottish taxpayers liable to income tax at the Scottish intermediate rate of 21%, can claim the additional 1% relief due on some or all of their contributions above the 20% tax relief paid to you. You must not give relief at 21% to these members. Instead, a member will do this by contacting HMRC if they do not already complete Self Assessment returns, or through their return if they do.”
