Consultation on changes to levy methodology for the 2021/22 levy year– PLSA’s response (2020)
Overall, the PLSA supports the proposals put forward to ease the burden on smaller schemes and to mitigate the risks from Covid-19. We appreciate the proposals to make the invoicing system more streamlined and the measures to ensure security for users of the system.
There are mixed views on the PPF’s approach to set the Levy Rules for 2021/2022on a year by year basis, as this provides a degree of uncertainty for future changes to the levy, which could make business planning more difficult. However, on balance, the PLSA believes that given wider economic circumstances, this year by year approach is overall helpful.
The proposal to introduce an adjustment to the levy calculation to reduce the financial burden for small schemes, based on the smoothed liabilities, is broadly welcomed by the PLSA, as is the proposal to taper the reduction to avoid a cliff edge at £20 million, so that a full levy is paid at £50 million liabilities.