HMRC Newsletter No 10
Her Majesty’s Revenue & Customs (or HMRC as they like to be known) have just published yet another of their A-Day updates in the form of the tenth edition of their Tax Simplification Newsletter. I’ve brought most of the other nine to your attention up to now, so feel it’d be remiss of me not to tell you about this one.
It’s got some good stuff in it as usual, including the ‘Ten things you need to be aware of before 6 April 2006’. It’s always ten isn’t it? Never nine or eleven. They’re not the top-ten I’d’ve picked, but it’s all subjective I suppose. One interesting thing (number seven out of ten in the HMRC list) is where they say:
“Member information – do the members of your scheme know what the new rules mean to them? If not and you are not offering certain elements of simplification, will they be coming to you to ask why they can’t have a 25% tax free lump sum or why they can’t take their benefits and carry on working?”
That takes me back a bit and is exactly the point I was making in a BeeLine I wrote in September 2004 about people being miffed if their trustees don’t get their act together. Trustees are clearly going to have a problem if their scheme members are attracted to the sexier aspects of the new tax regime, but pension schemes are not amended to allow for them. It’s probably a bit late now for trustees to start thinking about such issues, but hopefully those who’ve been kept up-to-date with the changes as they’ve developed since the Finance Act 2004 will be better prepared than those who’re only just finding out about this stuff. To be honest, anyone who’s not ready for A-Day by now has probably already missed the boat and they’ll be playing catch-up for the next few years.
As well as the top-ten A-Day list, there are other useful bits on how to claim tax-relief at source after 6th April 2006 and some more detail on what a ‘block transfer’ is and isn’t, there is also a useful chart that you might like to pin up on your wall somewhere. This summarises all the information that trustees, scheme administrators, employers and individuals will need to submit to the HMRC both on and after A-Day and helpfully sets out who can do what, how and when. It lists, for example, the process for forms APSS 200, 201, 202 and 203 to be submitted where people are looking to protect existing rights by applying for an Enhanced Lifetime Allowance. Interestingly, the chart, which is headed up ‘What can be done at A-Day’, says the following up-front and in bold:
“Please note you should not submit any forms before A-Day on the draft versions that are currently on the Internet. Any forms completed before A-Day will be returned as they will not be valid.”
So hold your horses on that one is what you’re being told. In fact, as far as the practicalities of pushing the A-Day paper around are concerned I guess everyone who’s involved in the day-to-day side of this stuff should have a complete set of the HMRC newsletters bound up in a file on their desks. You can get the latest chapter for yours by following this link if you like:
7 March 2006
This document is based on Scottish Life's current understanding of the Finance Act 2004. This may be affected by future changes in legislation and the individual circumstances of the investor. Independent advice must be sought regarding the effect on a specific individual or scheme.
Any research and analysis included has been provided by us for our own purposes and the results of it are being made available only incidentally.