It is the time of year when your tax return is due. This is relevant to people who earn money in addition to teaching and/ or outside the PAYE scheme.
As it is January, it is a useful time to offer a reminder of what this means for you and your Teachers’ Pensions Scheme. You should read on if the following applies to you:
– You are liable for a tax charge for 2017/18 input period
– You have informed the HMRC via your self-assessment tax return
– You need Teachers’ Pension Scheme to pay this tax for you. This will be exchanged for a just and reasonable debit applied to your eventual benefits.
If you have said yes to all these statements, then you need this following advice. It means you are intending to make a scheme pays election on a ‘voluntary’ basis. HMRC will need this payment by 31st January 2019.
Here is the most important reminder: it will take the scheme some time to process the request, therefore it needs to be with TPS before 31st January, else you may be expected to pay interest. This interest will be the sole responsibility of the member. There is legislation that does not permit the scheme to pay the interest on the member’s behalf by means of the voluntary scheme pays. Therefore, this must be met by the member. Ideally, it would be better if the forms were received well before 31st January.
There is more information available on the TPS website and the HMRC have also issued a manual. However, there is a lot of technical advice contained in these documents. Therefore, this may be one of those times when you might need an independent advisor to guide you.
The mandatory scheme pays election for 2017/18 remains 31st July or the date of your retirement if earlier. If you want to know more about this then again you might want to speak to an independent advisor.
The content in this article was correct on 10th December 2018. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on voluntary and mandatory election pay. Please use the contact form below to arrange an informal chat with an adviser and see how we can help you.
Although Teachers Financial Planning are specialists Financial Advisors, we are not tax advisors, so you will need to seek advice from an Accountant or your usual tax advisor.