HMRC has announced that services to help savers correct their tax position if they have been affected by the McCloud pensions remedy will remain closed until September 2024, in order to make a number of changes to the scheme pays processes.

HMRC previously closed the 'calculate your public service pension adjustment' service in April due to a technical issue, with the service initially scheduled to re-open the service in July 2024, following additional improvements.

However, HMRC has since confirmed that the service is now expected to re-open in September 2024, after the government identified other opportunities to improve the customer journey during this process, including streamlining the scheme pays processes for both members and pension scheme administrators.

"We have been conducting detailed testing on the new income sub-journeys and resulting calculation of tax charges, to ensure the correct outcome for all members," HMRC stated.

"Due to the level of development and testing that is required, we have decided to keep the service closed for longer. We apologise for this delay, and we have not taken this decision lightly, but we are keen to ensure that we get this right for all our customers."

In particular, HMRC is working to remove the original pension input amounts for the remedy period, meaning that, for the tax years 2015 to 2016 through to 2021 to 2022, members will no longer be asked to enter the value of their original pension input amount.

HMRC also announced plans to introduce a triage process to help members decide whether they need to use the full calculator and submission service or not, as it acknowledged that a lot of members who receive remediable service statements will not have any changes to tax charges that would need to be reported to HMRC.

HMRC is also making changes to the income sub-journeys, as it confirmed that, in cases where the member does not know the amount of their net income or threshold income, they will be presented with additional questions throughout the submission for the service to complete the relevant calculation.

Using the information entered as part of this new element of the journey, the service will determine if the member’s threshold income is above the threshold income limit for the relevant tax year and, if so, then the service will ask further questions to establish if the member is above the adjusted income limit for the relevant tax year.

If the member’s income is above the adjusted income limit for the relevant tax year, the service will retain and use the adjusted income amounts to calculate the member’s tapered annual allowance.

The service will also ask members to enter their personal allowance for each year, to ensure that the tax charge is calculated correctly to give an accurate result of any charge or repayment due.

Where, as a result of the remedy, a member’s annual allowance charge in any of the tax years 2019 to 2020 through to 2021 to 2022 is reduced, and the scheme originally paid the charge, HMRC will send details straight to the pension scheme, for the repayment claim to be made.

In addition to this, HMRC is making changes to ensure that members that have to pay more tax as a result of the remedy will be able to use the calculate your public service pension adjustment service to declare the tax charge, rather than having to contact the scheme administrator with details of each scheme pays election that they decide to make.

This, along with future tax regulations, is expected to remove the requirement for the member to contact the scheme administrator, in every situation where additional tax is due as a result of the remedy, that they want the scheme to pay.

The changes will also allow members to ‘save and return’ to the form, with members given nine months from when they last saved their progress, to make a submission.

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