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Law360, London (March 5, 2021, 1:19 PM GMT) -- Britain's tax authority has given pension schemes an extra three months to submit their paperwork and is allowing them to be more flexible with payment breaks for clients because of the coronavirus pandemic.
HM Revenue & Customs said that it will extend a set of temporary measures amid the health crisis that it put in place for pension schemes up to the end of June 2021.
The steps were first announced in March 2020, the same month the government enforced lockdowns that have hit businesses, pension savers and badly affected the economy. The temporary efforts have been extended approximately every three months since then.
HMRC said on Thursday that it had made "temporary changes to some pension processes to help scheme administrators during the coronavirus pandemic. We've reviewed the following temporary changes and are extending them until 30 June."
Under the measures, administrators of retirement plans can directly give rent payment "holidays" for commercial properties they hold without first obtaining an independent valuation. Such valuations are usually required before administrators can grant a payment break.
Trustees can also submit documents such as their so-called Accounting for Tax returns, known as AFT, after the date they fall due if their resources have been hit by the virus, according to the tax authority. Pension funds typically submit their AFT returns when they make payments that are subject to tax.
The temporary rules also allow leniency when it comes to legally mandated reporting requirements. This includes the specific requirement to inform HMRC if a scheme has transferred sums to a recognized overseas pension plan.
In typical circumstances, administrators could be liable to a penalty if they fail to tell HMRC of such overseas transfers within 60 days of the transaction.
But any penalties for late filing will be canceled under the temporary measures, according to HMRC, which wants administrators to contact it if they face problems because of the COVID-19 crisis.
HMRC's flexibility is in line with the approach taken by regulators such as the Financial Conduct Authority, which has worked with banks to allow mortgage payment holidays for customers hit by the pandemic.
Insurance companies have also given clients flexibility with their home and motor policies so that, for example, office-based policyholders who are working at home because of the virus will not need to contact their insurers to extend their home cover.
--Additional reporting by Joanne Faulkner. Editing by Joe Millis.
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