EIM15210 - Employer-financed retirement benefits schemes: payer's responsibilities: operation of PAYE

Where a payer makes a lump sum payment that is chargeable under Section 394 ITEPA 2003 there is an obligation to deduct and account for tax under the PAYE Regulations on the chargeable payment.

PAYE does not apply to the provision of non-cash benefits under an employer-financed retirement benefits scheme. In such a case tax is collected under Self Assessment instead. See the last part of EIM15200 for guidance on reporting the provision of such benefits.