Scheme sanction charge meaning

In this issue Employment taxes Budgets and Finance Bills VAT International Taxes management and litigation Companies and corporation tax Anti-avoidance Devolution Pensions LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&A Useful information Employment taxes Royal Assent for National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 The National Insurance Contributions (Secondary Class 1 Contributions) Bill—bringing in an uplift to 15% for the main rate of employers’ secondary Class 1 National Insurance contributions from 13.8%, and cutting the secondary threshold to £5,000 per annum—was first set out at Autumn Budget 2024 and obtained Royal Assent on 3 April 2025. The provisions apply from 6 April 2025. See: National Insurance Contributions (Secondary Class 1 Contributions) Act 2025. HMRC publishes Employment Related Securities Bulletin 59 (March 2025) Private Intermittent Securities and Capital Exchange System (PISCES)—policy...

Morgan Lloyd Trustees Ltd v HMRC [2025] UKUT 102 (TCC) The company acted as trustee to small, self‑administered pension schemes (SSASs) established by more than 500 employers, who then entered into arrangements with their SSASs aimed at releasing cash. The structures adopted were either loans, secured by charges over various intellectual property (IP) items—such as domain names, websites and trade marks—or, alternatively, sale and leaseback, or sale and licence‑back, deals concerning comparable IP assets. HMRC took the view that many employers had received unauthorised employer payments and accordingly issued assessments to unauthorised payment charges and surcharges. In addition, HMRC assessed MLT to scheme sanction charges. MLT applied to HMRC for discharge of the charges under FA 2004, s 268; however, HMRC refused certain applications and concluded that others were submitted outside the time limit. MLT and the employers appealed to the FTT, which dismissed all of the appeals. The first issue for the UT was the extent...

There is no overall cap on the benefits a registered pension scheme may provide. Nevertheless, under the Finance Act 2004 (FA 2004), if a scheme makes an unauthorised payment: tax liabilities will usually arise for both the individual receiving the payment and the scheme itself. For more detail, see Tax charges on making unauthorised payments, below in the worst case, the scheme could face de-registration, leading to the loss of its tax-privileged status. For more detail, see De-registration and the de-registration charge, below specific reporting obligations will apply. For more detail, see Reporting requirements and penalties, below In certain situations, HMRC may grant a discharge from some of the tax charges linked to unauthorised payments. For guidance, see Applying to HMRC for discharge from tax charges, below. Further exceptions to the standard unauthorised payments position exist and are set out in Practice Note: Unauthorised payments: exceptions. For an explanation of what constitutes an unauthorised payment, see Practice Note: Authorised and unauthorised payments...