扒哥吃瓜

Overview

If you鈥檙e paying a company pension to a retiring employee you put the payment through your payroll, but not in quite the same way as when you pay wage or salary payments to employees.

If your pension scheme is registered with HMRC do not deduct or pay any National Insurance contributions. Pensions paid from registered schemes include those paid when an employee retires through ill-health. You should deduct PAYE tax in the normal way.

If your pension scheme isn鈥檛 registered with HMRC contact HMRC鈥檚 Employer Helpline.

Employee gets a new pension

When you start paying a new pension to an employee who has just retired from working for you, carry on using their existing payroll record - but you鈥檒l need to give them a different payroll ID for the pension payments. Do not include their leaving details on your Full Payment Submission (FPS) as they鈥檙e still on your payroll.

If they鈥檙e going to carry on working for you, you鈥檒l need to set up a new payroll record and payroll ID for their pension payments.

If you add multiple pensions together so that you make just one payment, you only need one pension payroll record - but if you pay each pension separately, you鈥檒l need a unique payroll record and payroll ID for each pension.

New payroll information for pension recipient

You鈥檒l need this information for the FPS:

• the date their pension started
• 鈥榊es鈥� in the occupational pension indicator field - and do this for each pension payment you make
• full annual amount of the pension
• payroll ID - it has to be a new one for their pension payments
• payroll ID changed indicator and their previous payroll ID

Tax code to use

Use the table below to check what code to use until you get a new code from HMRC.

Pension recipient鈥檚 situation	Tax code to use
Employee has just retired from working for you	The same tax code you used for them when they worked for you - but on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis
Employee who will start getting a pension from you and carry on working for you	Code 0T on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis
Employee who used to work for you and has now reached the age when they can get a pension from you - and they have a P45 from another employer	The tax code from their P45 on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis
Employee who used to work for you and has now reached the age when they can get a pension from you - but they do not have a P45 from another employer	The emergency tax code on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis

If the pension recipient gives you a P45 after you鈥檝e started paying their pension and HMRC has already given you a new tax code, destroy the P45. But if you haven鈥檛 been given a new tax code, use the tax code from the P45 on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis.

New pension paid to a dependent

If your new pension payment is to a dependent of an employee who鈥檚 died, follow the steps outlined in the earlier section to set up new payroll information - but use the personal details and National Insurance number of the dependent.

Show on your payroll that the pension is being paid because they鈥檙e a recently bereaved spouse or civil partner.

Starting a new tax year

If HMRC hasn鈥檛 given you a new tax code by the end of the tax year, carry on using the same tax code in the new tax year but:

• apply the code on a cumulative rather than a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis
• make any adjustments to the code that are required by the P9X coding notice - HMRC will send you this

Pension recipient changes name or address

Enter the new details on your payroll records - but the pension recipient must also to HMRC.

If the recipient moves and you cannot trace them, you may have to stop their pension payments. If you do this, set the irregular payment pattern indicator. If you later find their new address, take the irregular payment pattern indicator off when you restart their payments.

Pension recipient dies

Put their date of death as the leaver date in their payroll record. If this is the first time you鈥檙e telling HMRC they鈥檝e died do not set the payment after leaving indicator. If you have already told HMRC you must set it.

If you鈥檝e more payments to make after they鈥檝e died and they鈥檙e for the same tax year use the same tax code. But if you have payments to make for a later tax year use the tax code you would have used if the recipient had still been alive - unless you鈥檝e already told HMRC they鈥檝e died. If you have told HMRC, set up a new payroll record and:

• use the code 0T on a 鈥榳eek 1鈥� or 鈥榤onth 1鈥� basis
• set the payment after leaving indicator

Pension paid to non-individual

If the pension passes to another individual (or individuals) set up a new payroll record for each new recipient. But if it鈥檚 to a 鈥榖ody鈥� (such as a personal representative, trustee or body corporate) then:

• use the tax code 鈥楤R鈥�
• leave the National Insurance number field blank
• enter 鈥榤ale鈥� as the gender
• enter 鈥楻P鈥� as the forename
• enter the name of the recipient body as the surname
• enter the address of the recipient body
• put 鈥榊es鈥� in the payment to a non individual indicator field
• do not enter a start date for the new recipient

Flexible access arrangements

If you鈥檙e paying pension payments to an employee who has flexibly accessed their funds, how you deal with these payments depends on whether they鈥檙e paid after, or instead of, any other pension benefits.

Paid after the standard pension benefits	Paid as the first and only payment from the pension
Treat the payment the same as earlier pension payments and use the same tax code	Use the emergency tax code on a week 1/month 1 basis
Give the pension recipient a P45 to show the pension has been paid off in full - with both the regular payments and the flexible access payment(s)	Give a P45 to the pension recipient
Put the payment date on their payroll record as the date of leaving	Put the payment date on their payroll record as the date of leaving
Complete the relevant fields on the FPS, including the payment type, and check box 168	Set the occupational pension indicator on the FPS and complete the relevant fields, including the payment type, and check box 168

Less common circumstances

Trivial commutation payments

These are one-off lump sums from defined benefit schemes that pay off, or are paid in place of a small pension, so that there鈥檚 no need to make regular payments - usually because the regular payments are small. They do not include lump sums paid as death benefits or for serious ill health.

How you deal with a trivial commutation payment depends on whether it鈥檚 paid after or instead of any other pension benefits.

Paid after the standard pension benefits	Paid as the first and only payment from the pension
Treat the payment the same as earlier pension payments and use the same tax code	Use the tax code 鈥楤R鈥� on a week 1/month 1 basis
Give the pension recipient a P45 to show the pension has been paid off in full - with both the regular payments and the trivial commutation payment	Give a P45 to the pension recipient
Put the payment date on their payroll record as the date of leaving	Put the payment date on their payroll record as the date of leaving
Complete the relevant fields on the FPS, including the payment type	Set the occupational pension indicator on the FPS and complete the relevant fields, including the payment type

Adding multiple pensions together

If you make one payment to a recipient made up of more than one pension:

• set up one payroll record only
• and you add another new pension you do not need a new payroll record - just put the new increased amounts into the FPS fields
• and one of the pension finishes show the new, lower amounts in the FPS fields

Paying more than one pension separately

If you pay a recipient more than one pension separately:

• set up a payroll record and payroll ID for each pension
• use the tax code appropriate for each pension

Merging pensions that were previously separate

If you merge two or more pensions into a single payment, for each pension you鈥檝e stopped paying separately:

• put a leaving date on the payroll record
• give a P45 to the pension recipient

Moving pension recipients from one payroll to another

If you鈥檙e moving pension recipients from one payroll to another and you need a new PAYE reference you should:

• transfer the payroll records to the new employer reference
• send an FPS under the old employer reference with leaving details, including the year to date pay and tax figures 鈥� do not prepare P45s
• send an FPS under the new employer reference restarting the year to date figures from zero - put the full starting details for each recipient on the FPS for the new reference and include the:
  • start date for the new payroll
  • annual amount of their pension
  • occupational pension indicator
• leave the occupational pension bereavement field on the FPS blank, unless you鈥檙e paying the pension to a dependent who鈥檚 been bereaved since the pension recipient joined the new payroll
• work out and deduct PAYE tax from any payments you make to the transferred pension recipients from the date they moved payrolls
• if you鈥檙e operating a cumulative tax code, use the pay and tax details from the old employer reference

You must submit the last FPS from the old reference before you submit the first FPS for the new reference. If you cannot to do this, contact HMRC鈥檚 Employer Helpline.

Contact HMRC at least 2 months before the scheduled transfer if you鈥檙e moving members that receive pension payments from one payroll to another under a new PAYE reference, and they:

• receive more than one pension under the existing PAYE scheme which are paid under separate payroll IDs and this arrangement continues under the new PAYE scheme
• have multiple pensions paid under one payroll ID at the old reference but will be paid under separate payroll IDs at the new reference
• have a suffix T code, including 0T and NT
• are paid in advance and the month 12 FPS shows an end date which falls in the following tax year, for example a pay date of 1 April and an end date of 30 April

HMRC will contact you within 15 working days for further information about these cases. They will review them and, if appropriate, issue revised tax codes after the transfer has taken place.