NIM02717 - Earnings of Employees and Office Holders: retirement benefits schemes from 6th April 2006 - registered pension schemes: payments from such schemes

Paragraph 2(b) of Part 6 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (as inserted by regulation 8(3) of the Social Security (Contributions) (Amendment No. 2) Regulations 2006)

Sections 204(1), 208 and 209 of, and Schedule 31 to, Finance Act 2004

A payment by way of any benefit from a registered pension scheme “RPS”, see NIM02715) to which:

  • section 204(1) (authorised pensions and lump sums) and Schedule 31 (taxation of benefits from a RPS); or
  • sections 208 (unauthorised payments income tax charge) or 209 (unauthorised payments income tax surcharge)

apply, is disregarded in the calculation of earnings for Class I NICs purposes. In simple terms, this means that any payment out of a RPS is not liable for Class 1 NICs.

For details of the Class 1A NICs position on a payment by way of any benefit from a RPS, see NIM14510​​​​​​