In section 2 of Pension Schemes newsletter 139 we outlined our plans to modernise the relief at source system. We said that we aimed to deliver in a staged approach, providing functionality to make interim claims digitally by the end of the tax year 2022 to 2023.
7.1 Digital interim claims — update The delivery of a digital interim claims service has proved more complex than we originally thought. Our overriding priority is to deliver a full digital service, including individual level data, for digitisation of relief at source claims by April 2025. We had intended that the digital interim claims service would be the first step towards this. However, having reviewed the work necessary for both the interim claims service and the full service, we’ve reluctantly decided not to proceed with a digital interim claims service.
7.2 Update on delivery We are now focussing our delivery effort on ensuring we deliver the new digital relief at source service by April 2025. This will modernise reporting for schemes and deliver improvements for you, members, employers and HMRC. All claims will be based on individual level data to allow HMRC to accurately calculate the tax relief due. The potential benefits include:
streamlined reporting to HMRC, with multiple forms and returns merged into one regular report
quicker payments as most claims will be paid within days of receipt, rather than weeks
removal of the need for some declarations from individuals — as HMRC will establish eligibility and the amount of relief
an alternative approach for handling overpayments of Pensions Tax Relief
We’re working closely with a group of stakeholders from the pensions industry to help us understand the challenges and benefits. We’ll continue to work with those in the industry to co-design the new service, test the new processes throughout the development phase and seek feedback to iterate our design. If you have any questions about digitisation of relief at source, email: pensionsprogramme@hmrc.gov.uk.