In the Pensions Schemes newsletter 115 (26 November 2019) HMRC have asked schemes to remind members who have exceeded the Annual Allowance for 2018/19 and have an Annual Allowance charge that must be declared as they have exceeded their Annual Allowance irrespective of who is paying the charge i.e. the individual or the Scheme through Scheme Pays. HMRC have confirmed:
‘Annual allowance – members declaring their annual allowance charge on their Self-Assessment tax return
‘We know that scheme members are forgetting to declare details of their annual allowance charge on their Self-Assessment returns.
‘We’d ask scheme administrators to remind those members who have exceeded their annual allowance for 2018 to 2019 and who do not have sufficient unused annual allowance to carry forward to cover the excess, that they must declare this on their Self-Assessment tax return, even if your scheme is paying the tax charge.
‘The Pension savings - tax charges (Self-Assessment help sheet HS345) has specific information on declaring the annual allowance charge on Self-Assessment returns.
‘Your members can also find information and guidance about annual allowance and carrying forward unused annual allowance on GOV.UK and they can use our calculator to check whether they need to declare and pay an annual allowance tax charge.’