BeeHive > BeeLines > HMRC Newsletter #29
HMRC Newsletter #29
Hmm! Here’s a funny one. I just read that back in 2001 a well-known UK tax handbook used up just 5,952 pages to lay out the UK tax laws of the day. Since then, of course, our pension tax laws have been simplified so it was rather alarming to hear that the current edition of the same guide runs to 9,866 pages and that only because the editors decided to use a smaller font to keep the whole thing under 10,000 pages!1
Anyway, while I’m on the subject of tax simplification I suppose I ought to let you know that Her Majesty’s Revenue & Customs (HMRC to you) have published the latest in their long line of newsletters explaining the detailed complexities of pension simplification. This latest edition, as the dyed-in-the-wool collectors among you will know, is issue number 29 in the series. If, like me, you’re collecting the whole set you can get a downloadable copy by clicking on this link here: Pensions Tax Simplification Newsletter 29
If you’re not a collector and want to review before you commit toner or inkjet ink to printing it you could do worse than scan through the summary I’ve produced below I guess.
The subjects covered in issue #29 are:2
- The 2007 Finance Act. Just letting us know that the Finance Bill received Royal Assent a few weeks ago and some of the headline changes it will introduce. Included in these are new rules for Personal Term Assurance, Alternatively Secured Pensions, Unauthorised Payments, Pension Commencement Lump Sums, Ill-Health Pensions, Unsecured Pensions, Winding-Up Lump Sums and the revised time limit on paying out lump sum death benefits. Most of these have been covered in previous BeeLines, but it’s nice to get them all in one document.
- Assignment of Annuities. This is a further clarification of what happens to pensions in payment when schemes are wound up and reassuringly states that when annuities are assigned to members in such circumstances they are not breaching any of the Scheme Pension or Lifetime Annuity conditions.
- Overpayments made in error. You’ll probably remember from Newsletter #19 that unauthorised payments that don’t exceed £250 don’t have to be reported to the tax guys on the Scheme Event Report. (What? You don’t remember that? Me neither if I’m telling the truth; it just all seems so long ago doesn’t it?) Well, whether you remember that or not, the good news here is that the £250 limit applies to unauthorised lump sum payments too. So no need to lose any sleep over that then.
- Code of Practice 10. You’ll probably be well aware that Code of Practice 10 limits the number of previous Finance Acts that HMRC will offer information or advice on to just four. Now, and listen carefully to this bit, even though this latest Finance Act is the Finance Act for 2007, the last four Finance Acts now exclude the Finance Act 2004 (the one that simplified pensions to the point where anyone could understand the subject and presumably the one people shouldn’t need any help with really, but don’t start me off on that…). The reason that the 2004 Finance Act is no longer in the top four isn’t because Pope Gregory’s been up to his tricks with the calendar again, but rather because there were two Finance Acts in 2005 (one to remember for future quiz nights I’d say). So the last four Finance Acts on the books are now the 2007 one, the 2006 one and the two from 2005. So in theory the seminal 2004 one gets consigned to the past at least as far as Code of Practice 10 is concerned. But, and this is the point of this piece in the newsletter, it doesn’t! A concession has been made because the bulk of the Pension Simplification legislation included in the Finance Act 2004 didn’t come into force until 6th April 2006 (and if you remember some of it didn’t come into force at all, but again, don’t start me off on that either…). Anyway, because of this the HMRC people have decided to extend the period during which they will deal with pension enquiries about the 2004 Finance Act for another year.
- Mandatory Electronic Filing. Those of you running pension schemes will know that the way of the web is the way of the future as far as dealing with the tax people is concerned and this is just a gentle reminder that anyone not filing their returns electronically after 16th October 2007 may be in line for a penalty. This reminder is really aimed at Scheme Administrators, but some employers and individual directors could be in the frame too, so it’s worth making sure you’re doing everything electronically that you should be I guess. This was all explained in detail in Newsletter #27 back in April this year, but this issue gives a summary of what’s what.
Anyway, that’s it on the simplification front for now.
See you soon.
11 September 2007
Sources:
1. BBC website 6 September 2007.
2. HM Revenue & Customs website, Pensions Tax Simplification Newsletter 29, 31 August 2007.
Any research and analysis has been provided by us for our own purposes and the results of it are being made available only incidentally.
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.
