DWP confirms COVID-19 pension process changes

The Department for Work and Pensions (DWP) has issued further guidance on changes to pensions processes being introduced as a result of COVID-19.

It's latest Pension Schemes Newsletter confirmed details on rent and loan payment holidays, as well as addressing issues around obtaining ‘wet signatures’ stemming from social distancing measures.

The changes will apply for a preliminary period of 3 months, when a review will be undertaken.

Any updates at this time will be provided in the June 2020 newsletter.

The department highlighted that whilst a payment holiday would usually require an independent valuation to confirm it was on a commercial basis, this will not apply for time being.

The guidance stated: "To help scheme administrators and businesses affected by the current situation, HMRC are content that any arm’s length commercial decisions relating to registered pension schemes, including rent holidays, will not give rise to an unauthorised payment charge and can be agreed without independent valuations taking place."

HMRC also confirmed that it will accept scanned relief at source interim repayment claims “for now”, encouraging schemes to submit these as soon as possible.

However, it has confirmed a temporary extension for interim payment claims, from the last working day of the month to the 8th of the following month.

The DWP also highlighted that some scheme administrators may be unable to submit relief at source excess relief schedules considering the circumstances and potential strain on resources.

In these cases, it has urged administrators into continue to report on their APSS105s and pay the excess amount, collecting and keeping copies of the information required by the pension tax rules.

It clarified: "HMRC will not retrospectively charge interest if you could not submit this."

The department has also agreed to cancel any penalties relating to AFT returns, or making tax charge payments, for the quarter ended 31 March.

Further guidance is also expected “very shortly”.

This also follows recent guidance from The Pensions Regulator, which outlined expectations for trustees and administrators, and sponsoring employers.

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