PTM056430 - Annual allowance: tax charge: scheme pays: deadlines
Source: gov.uk (2025-08-12)


Glossary PTM000001 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm000001)

For guidance on when a notice must be given for the 2011 to 2012 tax year, see previous versions of the Pensions Tax Manual on the National Archives website (GOV.UK) (https://webarchive.nationalarchives.gov.uk/ukgwa/*/https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual).

Notice given to the scheme administrator by the member (#IDA3AUUB)How the scheme accounts for their liability to an annual allowance charge under ‘Scheme Pays’ (#IDAE2TUB)Including the payment on an Accounting for Tax (AFT) return and making payment (#IDACZTUB)The member’s Self Assessment tax return (#thememberssareturn)

Sections 237B and 237BA Finance Act 2004

If a member decides to elect to require their scheme to pay all or part of their annual allowance charge, or 'Scheme Pays', then they will need to have met certain conditions and they will also need to give their scheme administrator notice that they want the scheme to pay their annual allowance charge (see PTM056420 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056420)). This notice will need to be received by the scheme by a cut-off date if the scheme is to become jointly and severally liable to the annual allowance charge.

Once a scheme becomes jointly and severally liable to the member’s annual allowance charge then there are also deadlines for the scheme administrator to include this liability on the Accounting for Tax (AFT) return.

Notice given to the scheme administrator by the member

The member must notify the scheme that they wish to use ‘Scheme Pays’ (a ‘Scheme Pays’ notice) and there is a deadline for giving the ‘Scheme Pays’ notice.

Ordinarily there is a ‘31 July’ deadline for giving the ‘Scheme Pays’ notice but, in certain circumstances, the notice deadline is either brought forward or extended.

31 July notice deadline

The member must give a ‘Scheme Pays’ notice by 31 July in the year following the year in which the tax year to which the annual allowance charge relates ended.

For example, if the member wants their scheme to pay their annual allowance charge for the 2022 to 2023 tax year then they must tell their scheme no later than 31 July 2024.

The notice must be given to the scheme administrator of the pension scheme concerned.

The member cannot notify the scheme that they wish to use 'Scheme Pays' before the end of the tax year in which the annual allowance charge arises.

This 31 July deadline applies in all cases unless the member’s circumstances mean the notice deadline is either brought forward or extended.

PTM056420 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056420) has details of the information that must be given in a notice, whether given by the usual 31 July deadline, a brought forward deadline or an extended deadline.

PTM056440 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056440) has details about the deadlines for members giving an amended notice to a scheme administrator.

Notice deadline brought forward

The 'Scheme Pays' notice deadline is brought forward for a pension scheme when the member is due to become entitled to all of their benefits from the pension scheme. Then the member must notify the scheme before that entitlement to all benefits occurs.

PTM056450 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056450) has more details about when the deadline for giving a notice is brought forward.

Notice deadline extended

The ‘Scheme Pays’ notice deadline is extended for a pension scheme when the following applies:
- the member is given a pension savings statement for a tax year
- on or after 2 May in the year following that in which the tax year in question ends, and
- before the end of the period of 6 years beginning with the end of the tax year in question
- the scheme administrator receiving additional information from a third party (see PTM167500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm167500))
- a change to the pension scheme rules (see PTM167600 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm167600))
- as a result of that change to the pension input amount, the member is able to use ‘Scheme Pays’ in relation to the pension scheme for the tax year in question.
Then the member must notify the scheme before the earlier of the following:
- the end of the period of 3 months, beginning with the day on which the scheme administrator gives the member the pension savings statement due to the change to the member’s pension input amount
- the end of the period of 6 years beginning with the end of the tax year in question.
Example

For the 2020 to 2021 tax year a member had not been able to use ‘Scheme Pays’ in respect of a pension scheme because, for that tax year, either the member’s annual allowance charge had not exceeded £2,000 or the member’s pension input amount for the pension scheme had not exceeded £40,000 (or both).

In September 2022, the member is given a pension savings statement due to a change to the member’s pension input amount for that pension scheme for the 2020 to 2021 tax year and that change in pension input amount was caused by either the scheme administrator receiving additional information from a third party or a change to the pension scheme rules.

As a result of that change in pension input amount, for the 2020 to 2021 tax year, the member now has both an annual allowance charge that exceeds £2,000 and a pension input amount for the pension scheme that exceeds £40,000.

This means the member is now able to use ‘Scheme Pays’ in respect of the pension scheme for the 2020 to 2021 tax year (provided the member gives the ‘Scheme Pays’ notice by the relevant deadline, in this case being the ‘3 month’ deadline described immediately above).

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How the scheme accounts for their liability to an annual allowance charge under ‘Scheme Pays’

Where a scheme administrator becomes jointly and severally liable to a member’s annual allowance charge under ‘Scheme Pays,’ the tax charge should be included on the scheme’s AFT return - see PTM162000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm162000) for more information about the AFT return.

The AFT return is a quarterly return and ordinarily the scheme administrator only needs to complete an AFT return if one or more of the tax charges that the scheme administrator is responsible for paying via the AFT return has arisen in a quarter.

Where the scheme administrator’s liability to a tax charge has arisen because of ‘Scheme Pays’ the reporting and payment of that liability can be made to a different deadline.

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Including the payment on an Accounting for Tax (AFT) return and making payment

The scheme administrator pays the annual allowance charge it is jointly and severally liable for, and accounts for that charge, on the Accounting for Tax (AFT) return but the member also has to include it on their own Self Assessment tax return.

The following deadlines apply when the scheme administrator becomes jointly and severally liable following receipt of a ‘Scheme Pays’ notice.

Different deadlines apply where the scheme administrator has a further liability following an amendment to the ‘Scheme Pays’ notice (see PTM056440 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056440)).

Ordinarily, the scheme administrator should account for the annual allowance tax charge for a tax year on an AFT return for the later of the following quarters:
- the quarter ending 31 December of the year following the year in which the tax year ended, and
- the quarter following the quarter in which the scheme administrator receives the ‘Scheme Pays’ notice.
Where the ‘later of’ deadline is the quarter ending 31 December of the year following the year in which the tax year ended, the scheme administrator must file the AFT return and pay the tax due by the 14 February that follows the relevant quarter ending 31 December.

For example, the scheme administrator receives a ‘Scheme Pays’ notice in June 2024 for a liability relating to the 2022 to 2023 tax year. The scheme administrator must include this liability on an AFT return by the quarter ending 31 December 2024 and file the AFT return and pay the tax due by 14 February 2025.

Where the ‘later of’ deadline is the quarter following the quarter in which the scheme administrator receives the ‘Scheme Pays’ notice, the scheme administrator must file the AFT return and pay the tax due by the end of the 45-day period that applies to the relevant ‘quarter following’.

For example, the scheme administrator receives an extended deadline ‘Scheme Pays’ notice in June 2024 for a liability relating to the 2020 to 2021 tax year. The notice is received in the quarter ending 30 June 2024 and so the ‘quarter following’ is the quarter ending 30 September 2024. The scheme administrator must include this liability on an AFT return by the quarter ending 30 September 2024 and file the AFT return and pay the tax due by 14 November 2024.

These deadlines are the latest that a scheme administrator should complete the AFT return and make the payment of the tax due. The scheme administrator can decide to include the liability on an earlier AFT return and if they do so, the date for payment of the tax is the normal payment date for that return.

For example, a member notifies their scheme that they require it to pay their annual allowance charge for the 2023 to 2024 tax year and they give this notice on 15 September 2024. The scheme administrator decides to pay the tax before the deadline that applies in this case of 14 February 2026 for filing the AFT return for the quarter ending 31 December 2025. Instead, the payment is put on the AFT return submitted for the quarter ending 31 December 2024; the scheme administrator must file the AFT return and pay the tax due by 14 February 2025.

If the scheme agrees to pay an amount of a member’s annual allowance charge liability on a voluntary basis, the scheme would not have joint and several liability for the tax charge and the liability for the annual allowance charge would remain with the member. The payment made by the scheme on a voluntary basis should therefore be paid to the member’s normal Self Assessment deadline. If the AFT return process is being used to report and pay the tax being paid by the scheme on a voluntary basis, the scheme administrator will need to consider which quarterly period to use.

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The member’s Self Assessment tax return

The member will need to include the amount of the annual allowance charge on their Self Assessment tax return which should be submitted at the latest by 31 January of the year following that in which the tax year ended. If their scheme has joint and several liability to, or has voluntarily agreed to, pay any part of the annual allowance charge, the member will need to include this amount on their return. The member will be liable for any remaining charge and this amount should be paid to the normal Self Assessment deadline (see PTM056200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056200)).