Pensions Tax Relief Administration: Call For Evidence: PLSA Response
The Net Pay/RAS anomaly is an ongoing tax administration issue that results in approximately 1.5 million lower earners in Net Pay schemes missing out on pensions tax relief. It also affects many high earners in RAS schemes, as many do not claim the additional tax relief (beyond the Basic Rate relief automatically provided to them through RAS) due to them.
The PLSA has a longstanding position on this issue, which would involve a central solution implemented by HMRC (the P800 process), which would ensure that every saver receives tax relief. It would involve HMRC using real time information (that it collects throughout the year) during its end of year ‘sweep up’ to give tax relief to non-taxpayers who missed out in Net Pay schemes and higher rate taxpayers who missed out under RAS schemes.