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  • Scheme Pays

    Topics:
    • Working in the Northern Ireland Civil Service, 
    • FAQs and information for NICS Pension Schemes Members

    If you exceed the Annual Allowance and a tax charge is due, you can ask Civil Service Pensions to pay the charge on your behalf in exchange for a reduction in your benefits. This is called Scheme Pays.

    Please note that all dates and limits on this page relate to tax charges incurred for the 2023/24 tax year only, any tax charge due as a result of the Remedy Pension Savings Statement differ.

    There are two types of Scheme Pays: Mandatory and Voluntary

    Mandatory Scheme Pays

    Can be used if all three of these apply to you:

    • your Pension Input Amount within a single Civil Service Pension Scheme is in excess of £60,000, and
    • the tax charge resulting from the excess within that scheme is over £2,000, and
    • your Scheme Pays deduction is applied to the benefits within that scheme only

    Members with a tapered (reduced) Annual Allowance must have a Pension Input Amount in excess of £60,000 in one particular scheme (for example, alpha or classic) to use Mandatory Scheme Pays.

    For members with current benefits in both Principal Civil Service Pension Scheme (NI) and alpha, if their Pension Input Amount in each scheme exceeds £60,000 then they may be able to use Mandatory Scheme Pays to pay the tax charge for one scheme. The remaining scheme would be paid on a voluntary basis. This facility would not be available for those with tapered Annual Allowance wishing to use Scheme Pays for their entire tax charge.

    Voluntary Scheme Pays

    Can be used if:

    • you don’t meet the Mandatory Scheme Pays criteria, but you still wish to pay your tax charge by Scheme Pays

    Scheme Pays Quote Request Form

    If I decide to use Scheme Pays, what are the steps involved?

    You’ll need to advise HM Revenue & Customs (HMRC). This should be done via your self-assessment.

    Please note: To prevent late payment charges being imposed by HMRC, regardless of the Scheme Pays method used to pay your tax charge, we encourage you to take note of the Scheme Pays deadlines which can be found in the table below.

    Key dates

    ActionDeadline date
    You receive a Pension Savings StatementBy 6 October 2024

    Members request a Scheme Pays quote request form

    Return to:

    Civil Service Pensions (NI)
    Orchard House
    40 Foyle Street
    LONDONDERRY
    BT48 6AT
    By 8 November 2024
    We issue you with your Scheme Pays quoteBy 6 December 2024
    If you decide to go ahead with using Scheme Pays, you should complete and return your Scheme Pays form accepting the quoteBy 20 December 2024
    We will process your Scheme Pays deductionsBy 17 January 2025
    You should notify HMRC that you have a tax charge owing and inform them of your intention to pay it using Scheme PaysBy 31 January 2025
    If you are using Voluntary Scheme Pays, we'll pay your tax chargeBy 31 January 2025
    If you are using Mandatory Scheme Pays, we'll pay your tax chargeBy 14 February 2026

    Please note once we have received your application form, you won't be able to withdraw your application, as at this point we will adjust your benefits accordingly and the tax charge will be paid to HMRC on your behalf. You can use Scheme Pays every year that you have a tax charge to pay if you meet the criteria.  Each time you use Scheme Pays a pension debit entry will be recorded on your pension record and Pensions Increase will be applied annually

    Tax is your responsibility

    If you do have a tax charge, you’ll need to follow the HMRC guidelines for calculating, declaring and paying any tax due.

    There is information about Annual Allowance and Scheme Pays on the HMRC website

    HMRC provide a calculator to help you work out if you have a taxable breach. The calculator can be found at: Pension annual allowance calculator

    Tapered Annual Allowance

    Individuals with adjusted income over £260,000 may be subject to a tapered (reduced) Annual Allowance.

    Adjusted income is not based on your salary alone, if you have other sources of income you may need to include this when calculating your adjusted income.

    Further information on how to calculate adjusted income and tapered Annual Allowance can be found at: Pension schemes - work out your tapered annual allowance

    Related content

    • 2015 Remedy Regulations
    • Active Member Frequently Asked Questions (FAQs)
    • Added Pension - Limits and Deadlines
    • alpha moving dates
    • Annual Benefit Statements - FAQs
    • Benefits of the Northern Ireland Civil Service Pension Scheme
    • Deferred Members Frequently Asked Questions (FAQs)
    • Employee Contribution Rates
    • Employee Pension Notices
    • Exceptions to the Transfer Ban - Additional Q&A - April 2015
    • General information for pensioners
    • Immediate Choice Remediable Service Statement (RSS) Frequently Asked Questions (FAQs)
    • Important information about transfer restrictions before 6 April 2015
    • Important information about transfer restrictions from 6 April 2015
    • List of NICS Employers
    • McCloud Judgment and Remedy FAQs
    • National Fraud Initiative
    • Partial Retirement
    • Pension Fraud
    • Pension payment details
    • Pension Savings Statements
    • Pensioners Frequently Asked Questions (FAQs)
    • Pensions and tax
    • Pensions Information Sessions
    • Remedy Pension Savings Statement (Remedy PSS)
    • Retirement Lump Sums
    • Stakeholder pensions
    • Suspension of Cash Equivalent Transfer Values (CETV) calculations
    • Transfers
    • Voluntary deductions
    • Which NICS pension scheme am I in?
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