The McCloud remedy 

Changes were made to public service pensions in 2015 by the government. Most public sector workers were moved into reformed career average pension schemes. However, these changes did not extend to affect the pensions of some members who were close to retirement. A judgement followed from the Court of Appeal, which found that this amounted to age discrimination against younger members of the pension scheme.  

The McCloud remedy is part of the government's action to rectify the position for younger members of the pension scheme. Due to the remedy, younger members who have had an amount tested against the annual allowance or the lifetime allowance between 2015/16 and 2022/23 may find that amount needs to be changed. 

Deadline for reporting charges 

A person who is affected by the remedy must report charges, or changes to previous annual allowance or lifetime allowance charges, to HMRC by: 

• 31 January 2025, if they are a member of:
  • a chapter 1 scheme who, before 1 October 2023, had not started to take a pension, or if you’re a legal personal representative of a deceased member who had not died before this date; or
  • a chapter 2 scheme; or
  • a chapter 3 scheme; or
• 31 January 2027, if they were a pensioner or the legal personal representative of a person who had died before 1 October 2023.

If the person is more than one type of member and both deadlines would otherwise apply, they have until 31 January 2027 to report charges, or changes to previous charges, to HMRC.

ICAEW explained how agents can help members of pension schemes to report charges in an article published in December 2024.

For further information, see HMRC’s collection of guidance on the public service pension remedy.   

Deadline for scheme pays elections

If the person wants their scheme to pay any additional charges, the election needs to be made by:

• 6 July 2025 if they were an active or deferred member on 1 October 2023; or
• 6 July 2027 if they were a pensioner on 1 October 2023.

Legal personal representatives of a deceased member cannot elect for the scheme to pay, so will be liable for any additional charges.

2023/24 tax returns

31 January 2025 is also the deadline for submitting self assessment tax returns for 2023/24 online. 

Due to a delay in some public service pension schemes issuing pension savings statements (PSS) for 2023/2024, some taxpayers may not have details of their pension input amount when they come to complete their tax return for 2023/24.

Guidance published by HMRC states that a person in this situation should complete their tax return as normal, using a provisional figure calculated to the best of their ability, in order to avoid a late filing penalty.  When the person receives their PSS, they should update their return with the actual figure. This should be done by 31 January 2026.

If the actual figure is higher than the provisional figure provided, and the person is paying the tax charge themselves rather than using mandatory scheme pays, HMRC will contact them with a due date for making the payment on receipt of the updated return. Interest will be charged from 31 January 2025. However, a late payment penalty will be avoided if the additional liability is paid by the due date advised by HMRC. 

Where a person did not submit a tax return for 2023/24 based on the provisional figure, and later finds that a return should have been submitted, they may be charged an automatic penalty. HMRC says that, in such circumstances, the person will need to appeal the penalty and HMRC will accept the delay in issuing the PSS represents a reasonable excuse.       

Further information from HMRC:

• How to estimate a provisional tax charge
• How to amend a tax return
• Tell HMRC you no longer need to submit a tax return