Explanatory note

These Regulations amend section 193A of the Finance Act 2004 (c. 12). Section 193A requires the Commissioners for His Majesty’s Revenue and Customs (HMRC) to make top-up payments directly to individuals who save into an occupational pension scheme under net pay arrangements, in order to reduce disparities with occupational pension schemes administered under relief at source arrangements.

At present, section 193A only requires HMRC to make top-up payments to individuals whose total taxable income is below the personal allowance. However, this does not fully address the disparities between schemes administered under net pay arrangements and schemes administered under relief at source arrangements - there are individuals whose total taxable income exceeds the personal allowance who will nonetheless receive less relief under net pay arrangements than they would have done under relief at source arrangements. These Regulations address these disparities by requiring HMRC to make a top-up payment to individuals with pensions administered under net pay arrangements where they obtain less relief than they would have done had their pension been administered under relief at source arrangements.

A Tax Information and Impact Note has not been prepared for this Instrument as it contains no substantive changes to tax policy.