Inadvertently triggered MPAA due to a 'restoration' payment

Marcon

zAndy1 said:

So I've had a reply from BS about this, the first half of the email is basically them saying people had plenty of warning about this at which point I thought they were going to say tough there's nothing we can do but the 2nd half was more useful

'We understand from your email that, rather than receive the lump sum payment, you instead wish to receive your restoration payment in the form of an additional pension.  I can confirm we are prepared to put your restoration benefit into payment in this way conditional upon you returning the net lump sum payment of £175.20 to the Scheme bank account[1] quoting the reference xxxxxxxxxxxx' 

On receipt of the net lump sum payment, we will make alternative arrangements in respect of your restoration payment: specifically, we will make an additional pension[2]payment of £10.72 per annum to you with effect from 5 October 2022.

Please note that the Trustee of the British Steel Pension Scheme can give no warranty as to how HM Revenue & Customs (HMRC) may treat the return of the lump sum payment. Following the return of your net lump sum payment and us putting an additional pension into payment as described above, we will write to you to confirm that this has been done and to set out the relevant amounts. You should retain that letter for your records and may wish to share it with HMRC to evidence the form and amount of the benefits you have received.'

Does anyone think this will be enough for HMRC to remove the MPAA against me? That email doesn't sound like it's a guarantee they will even if I go down this route, I think maybe I'll have to ring HMRC and ask as it seems pointless doing this if it's going to make no difference anyway. Anyone have experience of getting an MPAA flag reversed? 

I think there's a very good chance you can avoid the MPAA, but other people's experience isn't relevant; nor is a straw poll on whether people think HMRC might or might not do something. All that matters is how HMRC is going to treat you. I doubt they'll give you a definitive answer over the phone (could be wrong!), and in any case you need to get it in writing from them - but get on and contact them.

zAndy1

Spoke to HMRC and they said if I pay back the lump sum and British Steel pay it as an additonal pension instead then it won't trigger the MPAA and I can continue to contribute as usual with a £40,000 limit. I did ask what I would need to do to remove the MPAA flag and they said nothing as far as they were concered but I'm a bit confused about that as surely there must be a flag somewhere so HMRC know the MPAA has been triggered. Anyway I'll pay the lump sum back and carry on contributing as normal and see what happens I guess

EdSwippet

zAndy1 said:

Spoke to HMRC and they said if I pay back the lump sum and British Steel pay it as an additonal pension instead then it won't trigger the MPAA and I can continue to contribute as usual with a £40,000 limit. I did ask what I would need to do to remove the MPAA flag and they said nothing as far as they were concered but I'm a bit confused about that as surely there must be a flag somewhere so HMRC know the MPAA has been triggered. Anyway I'll pay the lump sum back and carry on contributing as normal and see what happens I guess

Good outcome!

The MPAA 'flag', such that it is, rests with the pension provider(s), not really with HMRC. If you trigger the MPAA, your provider sends you a notice, and you then have 91 days to inform any other pension providers with whom you hold pensions. Details here:

PTM051700 - Annual Allowance: essential principles: information to member

So, assuming BS have undone the MPAA flag at their end, and that you haven't informed any other pension providers that you've triggered the MPAA, you should be good to go. (If you have informed any other pension providers, you'll want to unwind that speedily!)

squirrelpie

Probably a good idea to get the HMRC statement in writing if you can.