The scheme sanction charge is imposed at the rate of 40 per cent of the aggregate of the ‘scheme chargeable payments’ (see ¶381-700), made by the pension scheme in the tax year (FA 2004, s. 239(1), 240(1)).

Where the scheme chargeable payment is also an unauthorised payment which has given rise to an unauthorised payments charge (see ¶383-550), the tax due under the scheme sanction charge is effectively reduced by the amount of tax actually paid (rather than charged) under the unauthorised payments charge (FA 2004, s. 240(2), (3)).

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