Your guide to Scheme Pays elections

If the value of the benefits across all your pensions arrangements increase by more than £60,000 in a year, you may be subject to an Annual Allowance tax charge. This charge can either be paid directly through HMRC’s self-assessment arrangement or you can choose to have it paid on your behalf through a Scheme Pays election. This means the pension scheme pays the charge on your behalf and reduces your future pension entitlement.

There are two types of Scheme Pays: mandatory and voluntary.

Mandatory Scheme Pays

Mandatory Scheme Pays can be used if:

  • your Pension Input amount within a single scheme exceeds the £60,000 Annual Allowance; and
  • your total tax charge is over £2,000; and
  • your Scheme Pays election applies to the benefits within that scheme only.

Voluntary Scheme Pays

SPPA will accept a voluntary Scheme Pays election where the total SPPA AA Tax charge exceeds £1,000 if; 

  • You do not meet the mandatory conditions;
  • The charge is due to growth in combined SPPA scheme benefits (final salary and 2015 CARE benefits); or
  • you are subject to a tapered annual allowance.

The UK Government have published guidance that will help you understand your reduced (tapered) annual allowance.

Scheme Pays election deadlines

The deadline set by HMRC for mandatory elections is 31 July in the year following the year to which the annual allowance charge relates.

Deadlines for previous tax years are stated in the following table:

Tax YearStatement IssuedElection Form DeadlineMandatory DeadlineVoluntary DeadlineRevision Deadline
2017/2018October 201831 July 201931 January 202031 January 201931 July 2024
2018/2019October 201931 July 202031 January 202131 January 202031 July 2025
2019/2020October 202031 July 202131 January 202231 January 202131 July 2026
2020/2021October 202131 July 202231 January 202331 January 202231 July 2027
2021/2022October 202231 July 202331 January 202431 January 202331 July 2028
2022/2023October 202331 July 202431 January 202531 January 202431 July 2029
2023/2024October 202431 July 202531 January 202631 January 202531 July 2030
2024/2025October 202531 July 202631 January 202731 January 202631 July 2031
2025/2026October 202631 July 202731 January 202831 January 202731 July 2032

You'll have to send your election earlier if:

  • You expect to retire - your completed election must be sent to SPPA before your pension is authorised.
  • You reach age 75 - your completed election must be received by SPPA before your 75th birthday.

You’ll have to calculate your liability for an Annual Allowance charge based on the information contained in your Pension Savings Statement. If you have benefits in more than one scheme, such as an SPPA final salary scheme and career average CARE scheme, or other private pensions, then the sum of all of your pension input amounts should be considered.

As General Medical Practitioner members will not know their pension input amounts before the Scheme Pays election deadline on 31 July, we recommend that you submit your Scheme Pays election with an estimated tax in order to meet the HMRC deadline. This can be amended later and processing will be held until you receive your statement and confirm the charge yet to be paid, you will need to complete a second election form if the amount differs from your initial election.

Payment Deadlines

Mandatory Scheme Pays

For mandatory Scheme Pays the scheme administrator becomes jointly and severally liable (with the member) for the annual allowance charge and must pay this to HMRC within a given timescale. No interest is payable if SPPA makes payment by 14 February following the mandatory Scheme Pays deadline.

Voluntary Scheme Pays

Annual allowance charges that do not meet the mandatory Scheme Pays conditions are due to be paid to HMRC at the normal self-assessment deadline, the January after the end of the tax year for electronic returns. If you meet the conditions and SPPA accepts your Voluntary Scheme Pays election, late payment charges and interest may be payable to HMRC from this date until the charge is paid. You will be liable for any such charges. 

Following receipt of an initial election notice within HMRC's deadline, you can complete a revised election if there’s a change to the amount of your Annual Allowance charge. This could occur if you received a provisional statement and your final statement shows the AA charge has either increased or decreased.

Any Scheme Pays election amendments must be received by SPPA no later than the 31 July that follows the end of the period of 6 years from the end of the tax year to which the tax charge applies.

Information regarding deadline dates as set by HMRC can be found in section PTM056440 of the Pensions Tax Manual.

Estimated Scheme Pays 

Mandatory Scheme Pays

If you think you will have an AA tax charge in 2024/2025 and want the SPPA to pay the tax charge to HMRC using mandatory Scheme Pays, but you have not received your 2024/2025 PSS, you can fill out a Scheme Pays Election Form and provide an estimate of your AA tax charge.

If you have completed Self-Assessment tax return with a provisional AA tax charge figure, you can use the same provisional figure to make a mandatory Scheme Pays election before 31 July 2026. If you have not received a 2024/2025 PSS at the time of making the election, SPPA will treat this election as an estimate.

When you receive your 2024/2025 PSS and have confirmed your actual AA tax charge, you will need to complete a revised Scheme Pays Election Form using the updated figure.  You will then have to update your Self-Assessment tax return upon receipt of a Scheme Pays Notice from the SPPA.

For tax years 2023/2024 and 2024/2025 only, if members are unable to submit a mandatory Scheme Pays election due to the 2015 Remedy and delays in the provision of their RPSS, any late payment interest charges imposed by HMRC can be reclaimed through the NHS Cost Reimbursement Scheme. This means that members will not be disadvantaged because of delays in the provision of their RPSS.

Voluntary Scheme Pays

If you have not received your 2024/2025 PSS and are unable to make a mandatory Scheme Pays election by the 31 July 2026 deadline, you may still submit a voluntary Scheme Pays election after that date once you receive your PSS. However, this would be considered a late voluntary Scheme Pays election and you may be subject to late payment charges and interest levied by HMRC.

Apply for Scheme Pays

If you wish to apply for Scheme Pays, completed forms should be submitted by email to sppaschemepays@gov.scot.

If your election form is electronically signed, your email must also confirm that you have personally submitted the request as we cannot accept Scheme Pays election forms submitted by a third party.

Any Scheme Pays election forms that are incomplete or submitted by a third party will be rejected.  Please note that rejected forms will not be considered as meeting any applicable deadlines, which may affect how your election is  processed and any subsequent payments to HMRC.

Download the application form

Alternatively, completed form can be posted to:

Scottish Public Pensions Agency
7 Tweedside Park
Tweedbank
Galashiels
TD1 3TE

Scheme Pays FAQs

Frequently asked questions on the topic of Scheme Pays elections

Read More