TAX YEAR END REPORTING – ANNUAL ALLOWANCE CHARGE AND SCHEME PAYS

At Transact, we understand that exceeding the annual allowance for pension contributions can result in significant tax charges for clients. To alleviate this burden, Transact offers a voluntary scheme pays option, which can be a lifesaver for clients facing annual allowance charges and the associated tax bills.

Our annual report to investors includes a certificate of member pension contributions, which can be useful for clients in supporting claims for higher or additional rate tax relief. However, more comprehensive pension contribution reports are available on TOL under Reports > Contributions to Transact Pensions. These reports contain historical information that can be used for Annual Allowance calculations and carry-forward purposes.

The on-screen report provides contribution details for the current tax year and the three previous years. For a more detailed history, clients can download the Excel report, which provides data spanning seven years.

Annual Allowance Charge

For clients who exceed their available Annual Allowance (after accounting for any carry-forward allowances and restrictions due to the tapered or Money Purchase Annual Allowance), the excess will be subject to an Annual Allowance charge.

The charge can either:

• Be paid by the client via their self-assessment tax return; or
• Be paid by the pension scheme if the client requests this option.

If clients wish to use their Transact pension scheme to pay the charge, they must complete our Annual Allowance Charge – Scheme Pays Notice (T062). This form can be found on TOL under Information – Supplementary Forms within the Pension and SIPP Wrapper section.

Reporting Excess Pension Savings

Please note that excess contributions must still be declared in the client’s self-assessment tax return. The following three pieces of information must be included:

• The amount of pension savings in excess of the Annual Allowance.

• The amount of Annual Allowance tax being paid by the scheme. Leave this blank if the member is paying the tax charge themselves. Otherwise, state the amount of the charge you wish the scheme to pay.

• The pension scheme tax reference number. This will vary depending on whether payment is being made by the Transact Personal Pension or Transact SIPP. Ensure that you use the correct reference number to avoid issues with linking payments to your online tax account:
  • Transact Personal Pension: 00605455RP
  • Transact SIPP: 00720366RQ

For Transact S32 or Executive Pension Plans, unique reference numbers apply. Please contact your client service team if you need this information. If the scheme is not making the payment, there is no need to provide this number.

Self-Assessment Submission

If completing an online self-assessment:

• Navigate to the ‘Tailor Your Return’ section to submit this information.

If submitting a paper self-assessment:

• Provide this information on page 4 of form SA101 (Additional Information).

Deadlines for Scheme Pays Requests

Voluntary Scheme Pays

Most requests we receive are on a voluntary basis. For voluntary Scheme Pays:

• The charge must be paid in line with HMRC’s usual self-assessment tax deadline: 31 January following the relevant tax year-end.

• To ensure timely payment, completed forms should be received at Transact by 31 December following the relevant tax year-end. Forms submitted after this date will still be processed but HMRC will receive the payment after the deadline.

• Charges are paid as part of our quarterly tax payments to HMRC, any late submissions could delay payment until after April.

Mandatory Scheme Pays

A longer deadline applies if the request qualifies for mandatory Scheme Pays:

• If this applies, the member must provide the form 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 charge arose during the 2024/25 tax year, we must be notified by 31 July 2026.

• Mandatory Scheme Pays is only available if:

1. The charge exceeds £2,000; and
2. Pension input into the relevant scheme exceeds the Annual Allowance (currently £60,000).

All information is based on our understanding and interpretation of applicable law and regulation.

 

 

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2. TOL Recent Enhancements 
3. Our New Account Opening API
4. CURO 3 & Fee Reconciliation
5. FCA Ongoing Service Review
6. Transact – BlackRock MPS Update
7. Offshore Reporting Funds – Excess Reportable Income and Capital Gains
8. Tax Year End Reporting – Annual Allowance Charge And Scheme Pays
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10. Interest On Cash
11. Transact Events 2025