The Scottish Public Pensions Agency has announced it will now accept a scheme pays election from members who become subject to an Annual Allowance tax charge even where the charge or part of the charge relates to pensions growth ('pension input amount') between their reduced tapered Annual Allowance and the Standard Annual Allowance of £40,000.

This applies from the 2016/17 tax year and this will be welcome news for members of the Scottish Public Pensions Agency.

Without this option, if a member had pension growth of say £40,000 but was only entitled to a tapered annual allowance of £10,000 then they may have faced an annual allowance tax charge of up to £13,500 payable by 31 January following the tax year. In the first year this applies, they may also need to make a payment on account towards the following tax year which increases the amount due from £13,500 to £20,250. 

As far as we are aware, the NHS Pension Scheme in England has not introduced the same voluntary option.