PAYE130065 - PAYE service income, allowances, benefits and deductions: IABD: pensions

The table shows the type of pension and whether

  • The amount is carried forward to be coded in CY+1

In your day to day work you should not include new sources for Occupational Pension, see PAYE11115 for further information.

You should remove Occupational Pension as a coding deduction and code as an employment, for more information see PAYE76155.

Item

Carried Forward

State Pension

YES

Occupational Pension

YES

Public Service Pension

YES

Forces Pension

YES

Personal Pension Annuity

YES

Lump Sum Deferral

NO

Note: Where IABD has carried forward a zero ‘0’ amount for Forces Pension it will display in the calculated tax code but will not be output on the P2 Notice of Coding.

The Pensions screen displays the current amount which is view only. You can enter any revised information in the New Amount field

  • You should enter the amount in pounds and pence
  • You should enter the full amount for the year with the exception of first year State Pension
  • Use the State Pension Details screen to record the details of State Pension
  • Use the Other Benefits field, see PAYE130075 to record Widow’s Pension, Widowed Mother’s or Widowed Parent’s Allowance.  See Action guide tax40161 and PAYE13110 for more information on how these should be calculated
  • Use the Bereavement Benefit field, see PAYE130075 to record Bereavement Allowance for more information see the action guide tax40161

Note: You should ensure you review the Pension Details screen before completing the New Amount field. To display this screen select the Edit Record icon at the right hand side.

The Pensions Details screen will display

  • Pension type selected
  • Start date - must be entered in format DD MM CC YY
  • The amount
  • Tax deducted - in pounds and pence - this is only displayed if ‘Lump Sum Deferral’ has been selected
  • Frequency of Payment from the drop down box
  • End date if applicable - this date should not be prior to the Start date
  • The date must be entered in DD MM CC YY format

When you are recording State Pension for the first time, you need to establish the year it commenced. You should follow Action guide tax36160 when recording State Pension.

Once this information has been submitted from the Landing Screen, see action guide tax80248, the

  • Coding rules will determine if the actual or the annual amount should be used when coding for CY
  • Actual amount will be displayed on the Pension screen which is used in the end of year reconciliation for CY

If you have selected State Pension the following will be available for you to select as appropriate

  • State Pension Deferred
  • This is when the individual has elected not to receive the pension and no State Pension will be coded. To set the State Pension Deferred indicator you must
  • Enter the State Pension amount as 0.00
  • Set the State Pension Deferred indicator
  • Leave the Start date blank
  • Leave the Frequency of Payment as Select and [Save]
  • Make a Contact History note to show the date the State Pension Deferred indicator was set

If you are advised at a later date they are to receive State Pension, the tick in this box should be removed, and the appropriate fields completed.

  • Static National Insurance Benefit
  • You should select this when the customer takes up residence in a country with which the UK does not have a reciprocal Social Security Agreement allowing for pension increases. The UK State Pension will remain at the level it was on leaving the UK. The same amount of State Pension will be coded in all years and no update made annually
  • Estimated National Insurance Benefit
  • If you are recording State Pension from any information from the customer you must ensure this box is ticked. This will produce the correct notes on the P2
  • If for any reason the State Pension Benefits uprating cannot take place the annual percentage update will be applied and this will also tick this box
  • Actual National Insurance Benefit
  • If you are recording State Pension from a P46 DWP you should ensure this box is ticked. This will produce the correct notes on the P2
  • If the State Pension Benefits uprating has been applied that will also tick this box

In exceptional circumstances if the rate of pension changes during the year it commenced, you will need to manually calculate the amount for the year to ensure the correct amount of pension is included in the code and in the end of year reconciliation (follow Action guide tax36160).