HMRC UK: Public Pensions Remedy Member Compensation Guidance

We use some essential cookies to make this website work. We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. We also use cookies set by other sites to help us deliver content from their services. You have accepted additional cookies. You can change your cookie settings at any time. You have rejected additional cookies. You can change your cookie settings at any time. How to compensate members who make a claim in relation to annual allowance, lifetime allowance and unauthorised payments charges where they are affected by the public service pensions remedy. Get emails about this page Print this page If a member of your pension scheme has been affected by the public service pensions remedy, you may need to offer them compensation if they’ve overpaid the following: If a member has claimed compensation, HMRC will send you information about the member’s compensation submission. Compensation can be paid where tax cannot be reclaimed from HMRC, which is tax years in the remedy period before the tax year 2019 to 2020. Read the guides on how the public service pensions remedy has affected pension scheme administrators . When a member makes a submission for compensation through the calculator, HMRC may complete some checks against the information held on HMRC systems. After checking the information, HMRC will pass on the details of the claim, including any differences identified in the amounts reported and paid. If the member has an annual allowance or lifetime allowance tax charge originally reported by multiple schemes, we will only send information to the schemes that originally reported the charge, except where the scheme is a private sector pension scheme. Once HMRC collects all of the relevant information, we’ll send it to you through the Transfer files securely with HMRC service . You’ll need to download the file within 6 calendar days — after that time it will be deleted from your account. The information we send could include: We will also send at least one claim for compensation for the tax years between and including 2015 to 2016 and 2018 to 2019 for either: We will also let you know who originally paid the tax for the relevant tax year the member is claiming compensation for. This will show as either: If a member has multiple schemes (including private sector schemes), HMRC will review the total amount of the member’s original annual allowance or lifetime allowance tax charge previously reported. Where the charge was paid by multiple public service pension scheme administrators, we will send the information to all scheme administrator who originally paid the tax. We will apportion the claim between the schemes based on the percentage of the total originally paid by each scheme administrator. Where a member originally paid some or all of the tax, they will tell us in their claim which public service pension scheme they want to pay the compensation. This can be paid directly to them. A member had an annual allowance charge of £5,000 in the tax year 2016 to 2017 which they asked 2 schemes to pay. Scheme 1 paid £2,000 (40% of the charge) and scheme 2 paid £3,000 (60% of the charge). As a result of the remedy, the member’s total tax charge was reduced to £3,000 with the member claiming £2,000 for compensation. This would result in a claim of £800 (40% of £2000) in compensation to scheme 1 and a claim of £1,200 (60% of £2000) in compensation to scheme 2. Where there is a discrepancy in the information the member has provided and our records, we will: The error code will explain the difference found in the submission and our records. You have discretion to pay any amount of compensation due to members when they have been financially impacted as a result of the remedy. The Secure Data Exchange Service has been renamed the Transfer files securely with HMRC service. Get emails about this page Print this page Contents Related content Is this page useful? Maybe Yes