TPS - Scheme Pays and the Remediable Savings Statements

[@Whatonearthisgoingon0]

You are a star David. I had looked at scheme pays and wondered what the break even point was and gave up thinking it was too complex. You’ve managed to create a very informative video.

[@marysullivan2125]

Thank you very much for shedding light, David

[@just_interested1]

Well explained. Aren’t they charging interest in the owed tax charge? As they normally do for owed tax. Or has it already been calculated and added and hence is making up some of that tax charge.

[@robtudor3785]

Another outstanding explanation.

[@jamienewport]

Thanks for putting this out David. I'm trying to purchase some retrospective additional pension over 2 years from late 2015. Am I right in thinking that any additional tax due as a result of this would also be written off as it falls earlier than the 2019 cut-off?

[@dfountain]

Good question but I don't think so. The written off aspect of this relates to where the increase to the amount of allowance used has resulted from the rollback process and not from retrospective purchase of more pension. Also, bear in mind that increasing the pension in 2015 will have a follow through impact on subsequent years as you have a larger pension and therefore, where inflation is greater at the end of the year than the start, could lead to increases in the allowance used. For example, the biggest problem in this regard is in 2022/23 where you have a revaluation of the pension at the end of the year of 10.1% but the previous year was just 3.1%. If you purchase £6,000 in 2015 then in 2022 that would have been worth £7,200 but in 2023 inflation raises it to roughly £8,000. This increase of £800 goes through the AA calculation and would increase the amount of AA used in 2022/23 by about £9,200.