Has your Lifetime Allowance or Annual Allowance tax position changed as a result of remedy?
If it has you will need to use the HMRC Member Tax Adjustment Calculator which is available on the gov.uk website (see links below under related information).
Also published below are two factsheets to help members understand Unauthorised Payments and Annual Allowance and the impact remedy may have on them.
Please note: The HMRC Member Tax Calculator is now live and includes improvements to the Income sub-journeys, scheme pays - credit and elections, and the ability for members to save and return.
HMRC have also released a triage service for members and updated guidance.
What should members do now?
We know that some members will look to use the calculator twice,
- Firstly, to help inform your tax position so you can decide between legacy or reformed scheme benefits and,
- Then again when you have made your election, to submit the revised position to HMRC.
Where members are using the calculator upon receipt of an estimate or their retirement options you can use the Annual Allowance calculator: –
www.tax.service.gov.uk/pension-annual-allowance-calculator
The annual allowance calculator will provide you with details of the amount that is subject to a tax charge for each year, however it is unable to:
- Calculate the tax charge due based on the marginal rate or,
- Take account of any charges previously paid and make any adjustments for either compensation or increased tax charge.
Members who have had or are likely to have a tax charge will have been provided with a Notional Remediable Pensionable Saving Statement (NR-PSS), which gives the original position of what tax charges were paid by the scheme. With this information you will be able to assess your revised position, which will enable you to make a choice of remedy benefits.
What does the calculator allow a member to do?
The HMRC Member Tax Calculator allows you to:
- work out any repayments you are due for a lifetime allowance or annual allowance charge you have previously paid.
- work out new, reduced or extra lifetime allowance or annual allowance charges that you may have to pay.
- submit information for HMRC to review.
To use this service you will need your:
- pension savings statement (PSS), including any revised statements you have been sent.
- Self Assessment tax returns if you filed them.
- P60s and records of income dating back to the tax year 2015 to 2016.
- retirement statement or a benefit crystallisation event statement, if applicable.
You will also need details of any public service pension schemes you were a member of between 6 April 2015 to 5 April 2022 (the remedy period) and the tax year 2022 to 2023.
If you do not have this information, you should be able to obtain this from either your pension administrator (PSS, retirement statement) or Fire Authority (P60).