My Ref: MRP 1/8/3
11th May 2018
Circular Num: NP/86/18
To: The Secretary All Branches & Regional Councils
NETWORK RAIL SECTION OF THE RAILWAYS PENSION SCHEME –
BRASS TAX RELIEF
It has been brought to the RMT’s attention that that some members of the Network Rail section of the Railways Pension Scheme (RPS) who contribute to the sections Additional Voluntary Contribution arrangement (BRASS) have received a tax rebates from HMRC in respect of these contributions.
The RMT has contacted Network Rail pension’s management who have advised us that they are aware that some individuals contacted HMRC to request additional tax relief (for higher rate tax payers) on their BRASS contributions and that they have incorrectly received tax rebates as a result.
All employers including Network Rail operate what is known as tax relief at source for the deduction of all pension contributions which means that the full tax relief is provided on pension contributions as part and parcel of the payroll process. Therefore no individual should have the right to claim additional tax relief back from HMRC on any BRASS contributions as they are deducted via payroll at source.
Some individuals may make a one off lump sum BRASS payment at the end of the tax year directly to the RPS administrators, RPMI. When they do this RPMI provide them with a written receipt for the contribution along with instructions on how to claim tax relief back from HMRC.
Network Rail have advised us that they have made HMRC aware of their error and that HMRC have put in place a more robust checking process before issuing any further tax rebates. This process will also involve, if necessary, liaising with RPMI to check how an individual has paid their BRASS contributions so that rebates are not issued.
RPMI are expected to put a note in next pension bulletin in relation to this issue and that Network Rail have also provided an update for Network Rail employees via their social media source.
While it is down to the individual whether they decide to pursue a tax rebate of this kind the RMT would advice individuals very strongly to seek the necessary advice before taking such action as we are informed by Network Rail that HMRC are intending to claim the money back from those individuals who have received a rebate.
Network Rail advice us that if employees have received such a rebate they should firstly not spend the rebate and secondly make contact with HMRC to discuss whether or not they will be requesting that the monies is returned to them.
I would add that the RMT are unable to give union members advice on tax issues so if you require such advice you should contact HMRC on 0300 200 3300.