HMRC has deferred plans to digitise relief at source (RAS), after recent discussions with industry suggested that a solution for digitising RAS that could be delivered for April 2025 would not meet the needs of the largest schemes.

The government previously outlined plans for a staged approach to the digitisation of relief at source, initially aiming to provide functionality to make interim claims digitally by the end of the tax year 2022 to 2023.

However, HMRC announced earlier this year that it would no longer proceed with plans for a digital interim claims service, after work on this proved “more complex than originally thought”, with the department instead looking to prioritise work to deliver the new RAS service by 2025.

Despite this, an update following the Autumn Statement revealed that this work was no longer on track for 2025, after industry discussions suggested that any system put in place by 2025 would not meet larger scheme needs.

In addition to this, HMRC suggested that the deferral of digitisation of RAS will assist industry’s concerns on their capacity to deliver an ambitious programme of government reform.

Given this, it confirmed that the digitisation of RAS will not be operative until April 2027 "at the earliest", with no enabling clause included in the Autumn Finance Bill 2023.

Other work has continued, however, as the government introduced legislation in the Autumn Finance Bill 2023 to complete the work to remove the lifetime allowance, after initially announcing plans for this as part of the Spring Budget 2023.

The government also introduced secondary legislation to reduce the free-standing tax charge which applies to authorised surplus payments to sponsoring employers of a registered pension scheme from 35 per cent to 25 per cent, as announced at the Autumn Statement. This measure will take effect from 6 April 2024.

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