While we still await news of various pieces of new legislation proposed by HMRC over the past two years (see Aries article on missing legislation), other announcements have been made by HMRC in recent weeks.

HMRC has published Minutes of the last PSS Customer Forum Meeting, at which Aries raised several issues concerning the industry. These included unauthorised payments; responsibility for reportable events where the sponsoring employer, who also acted as trustee & administrator, ceases to exist; and QROPS. Other discussion focussed mainly on operation of Pension Schemes Online: HMRC was anxious to convince the Forum that the chaotic experience many had had in January 2008 would not be repeated this year.

Reminders of actions scheme administrators might need to take were the subject of Pension Schemes Newsletter 35 ("Simplification" has been quietly dropped from the title of this series), posted just before Christmas. A reminder has also been issued for Trustees of Pension Schemes who need to complete a Self Assessment return in relation to taxed investment income, any taxable income, or chargeable gains.

At the moment possibly the most eagerly-awaited regulations concern changes to the unauthorised payments regime, including trivial commutation, on which Aries submitted a report to HMRC twelve months ago. We think HMRC was expecting Ministers to agree on final regs before the end of last month. When these did not materialise, on 28 January HMRC hurriedly circulated industry bodies to let them know that scheme administrators could treat a payment designed by the May 2008 draft Authorised Payments Regs (see previous Aries Article) to become an authorised payment as such, and need not include it on the Event Report due by 31 January. If under the final regs it turned out that it remained unauthorised, no tax penalty for late notification or late payment would be levied provided prompt action was taken to comply.

Of greater utility, if not as clearly written as it could have been, was HMRC's answer to a particular problem with Australian QROPS which we included in our February 2008 submission to HMRC. Pension Schemes Newsletter 36 is about a problem which affects thousands of individuals who have emigrated to Australia.

Under Australian legislation a member has to pay 15% Australian tax on the growth of his UK pension fund if and when he transfers it after having been resident there for more than 6 months. Australian legislation stipulates that the tax must be paid by the QROPS directly to the Australian Tax Office on the member's behalf where the member instructs the QROPS to do so. The concern was that HMRC would see the payment of Australian tax by the scheme as an unauthorised payment. A number of Australian QROPS had written to HMRC to seek clarity but not had an answer. When UK legislation was amended in July 2007 we understand HMRC were reminded yet again of the tax issues in Australia, but the problem was not addressed: perhaps simply because no-one, including HMRC, had a view as the whole QROPS legislation was new and the first round of reporting not due until January 2008.

HMRC has been in correspondence with the Australian Tax Office about these issues, and as a result has decided that tax charges imposed on the Australian QROPS are properly regarded as scheme administration member payments (SAMP) under section 171 of FA 2004. These will be authorised payments. This is a significant departure from HMRC's practice up to now of finding it necessary to lay a new SI to cover each new case of an unauthorised payment which it decides should be authorised. A declaration instead that it lies within the scope of s.171 is much simpler.

Newsletter 36 goes on to distinguish the 15% tax charge on the scheme from a 46.5% tax charge on the individual on any amount transferred in which exceeds the non-concessional limit (currently $A450,000): this would be an unauthorised payment. The latter scenario is unlikely in practice however as an Australian Superannuation fund is not permitted to accept a transfer which exceeds this limit and must return it.

Meanwhile, in the run-up to Christmas HMRC's NISPI division published its Pensions Industry Newsletter 35, which starts by explaining how to find NISPI's pages on the HMRC website. It goes on to talk about the staggering 300,000 - 500,000 Apparent Un-notified Termination (AUT) notices issued by NISPI every year in cases where the scheme administrator has failed to notify termination of contracting-out by an individual. Other topics are

• the option under PA 2007 s.14 for schemes to convert GMPs to defined benefits on an actuarial equivalence basis (Regs are now expected to come into force in April or May this year, according to the DWP response to last year's consultation, published yesterday). While on the subject of GMPs, the draft GMP Increase Order for 2009 has recently been published, specifying 3% unsurprisingly (the figure is the lesser of 3% and the 12-month RPI to the previous 30 September, which was 5.0%).
• the impact of the introduction of the Upper Accrual Point from April this year, the amount being frozen at £770 per week; standard rate NIC s will be payable on earnings beyond this level up to the UEL (see below for relevant legislation).
• a free Payroll Cleanse Service to identify incorrect NINOs.
• HMRC has dropped the requirement to obtain the member's signature on CA Forms CA1550, CA1544, CA1545 and CA1548 provided the Pension Provider's declaration is strengthened to confirm that they have the client's request to give effect to, or to transfer, protected rights, in writing.
• contact details for NISPI's small Pensions Technical team.
• an admission that NISPI's computer system is generating statements of GMP liability (CA1625) showing the GMP is payable at the new State Pension Age. This is incorrect as the GMP is still payable at age 60 for a woman and age 65 for a man.