Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, whether he has made an assessment of the potential tax implications for recipients for civil of service pensions due to Capita delays with payments.

The Cabinet Office acknowledges the potential tax implications regarding pension arrears. For the vast majority of members, receiving arrears will not result in a higher tax liability as they will remain within the same tax band across the relevant years. However, where an arrears payment causes a member to move into a higher tax bracket in the year of receipt, individuals may request a schedule from the scheme administrator (Capita) to submit to HMRC.

This schedule allows HMRC to assess the tax on an accruals basis, spreading the income back to the years in which it was due to ensure the member pays the correct amount of tax.