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Document What is the difference between mandatory and voluntary scheme pays?

It is a compulsory HMRC requirement for all pension schemes to have a mandatory scheme pays facility. It is not; however, compulsory for pension schemes to offer an additional voluntary scheme pays facility. Because we can choose whether or not to offer voluntary scheme pays we can determine the conditions for when we will pay scheme pays using this facility.




For us to accept your scheme pays election under our mandatory scheme pays facility we need to receive the election by HMRC’s mandatory scheme pays deadline, the pension input amount in the 1995/2008 or 2015 NHS Pension Scheme must be more than the standard annual allowance and your annual allowance charge for the tax year has to be more than £2,000.


The mandatory scheme pays facility can only be used for an annual allowance charge calculated from a pension input amount, in the 1995/2008 or 2015 NHS Pension Scheme that is more than the standard annual allowance. The standard annual allowance is currently £40,000.


We become jointly liable with you for your annual allowance charge if paid by mandatory scheme pays.


For us to accept your scheme pays election under our voluntary scheme pays facility the pension input amount in one or both NHS schemes when the total pension input amount from both NHS schemes added together must be more than £40,000.


From 2017/18 the voluntary scheme pays facility was extended to include members affected by an annual allowance lower than £40,000.


You remain solely liable for your annual allowance charge if paid by voluntary scheme pays.


Paying the annual allowance charge


If we pay any of your annual allowance by voluntary scheme pays this must be paid earlier than HMRC’s deadline for mandatory scheme pays elections. The deadline for paying voluntary scheme pays elections is the same as HMRC’s deadline for paying tax on a self-assessment tax return, 31 January.


Tax Year



31 January 2018


31 January 2019


31 January 2020


31 January 2021


31 January 2022


NHS Pensions pay voluntary scheme pays quarterly to HMRC, with the final dates for payment being:



Deadline for payment

1 April – 30 June

14 August

1 July – 30 September

14 November

1 October – 31 December

14 February

1 January – 31 March

15 May


Which quarter your voluntary scheme pays election is paid depends on when we receive and accept your scheme pays election.


Because you remain solely liable for the charge until it is paid HMRC may charge interest if the annual allowance charge is paid after the self-assessment tax return deadline of 31 January.


The NHSBSA, NHS Pension Schemes and your NHS employer do not accept any liability for interest charges in respect of your voluntary scheme pays election.


It is important if you are estimating the annual allowance charge to provide us with a ‘best estimate’ on the Scheme Pays Election Notice (SPE2). This will help reduce the amount of interest HMRC will ask you to pay if you change your election because the annual allowance charge to be paid by voluntary scheme pays has increased.


You can find more information about scheme pays in the Pension Savings Statement Guide and factsheets on our website.
mandatory voluntary

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