Workplace pensions – a hidden problem.
We have published our latest position paper, setting out how confusion between net pay arrangements and relief at source pension contributions, might be impacting on employers, employees and the wider pensions and tax system.
It was back in 2021 that we wrote an article in TaxAdviser magazine calling for insight from advisers into workplace pension tax relief payroll errors they may be encountering in practice.
Five years on, and we think the same errors exist – but now are even more important to resolve, given the forthcoming net pay anomaly top up solution will rely on data held in HMRC’s systems. If pension contributions are being reported incorrectly through payroll, there is a risk that the data used to identify and compensate eligible individuals may itself be inaccurate.
This issue touches so many parts of the system – tax, pensions, payroll, guidance, compliance. It is perhaps only when everything is brought together and set out that the full picture and significance of it, becomes clear – hence this report. We hope that the relevant authorities will now review the issues identified and take action where necessary.
