Important reminders for pension providers and anyone paying pensions to former employees

PAYE should now be operated on all current and future pensions irrespective of the amount being paid.

Starting with your End of Year Return for the current tax year (2007-08) - due by May 2008 - you must:

• Submit a form P14 for all pensions paid in the year, irrespective of the amount.
• Where formal tax codes are not in operation and the pension is being paid without deduction of tax, continue to pay it gross until we let you know the correct code to be applied.
• Include the amounts paid in the End of Year Return for 2007-08 using a default code of NT on the P14.

We will review all P14s showing code NT and confirm that this is to remain or, change it to reflect the proper tax position for that pension.

To help employers who use payroll software make the necessary changes in time for their End of Year Returns, we have outlined what is required in the ‘Notes for Payroll Software Developers (PDF 398K)’ and have asked Software Developers for their continued support throughout.