PAYE72045 - PAYE operation: payments for PAYE purposes: occupational retirement benefit schemes

The following are chargeable to tax under ITEPA 2003 and PAYE should be applied

• Pensions paid direct by the administrator of a superannuation scheme which is approved or being considered for approval
• Annuities paid to scheme members by Life Offices under contracts securing the benefits

The Relief Instructions at RE 1620 onwards give more information, including details of annuities paid by life assurance companies under the form R86 or R89 procedure.

Pensions to non-UK residents

PAYE usually applies to pensions payable to non-UK residents but see Employment Income (EIM) Manual at EIM74402.

Relief may be allowable under a Double Taxation Agreement, see EIM74403.

Pension for unmarried minor child

Send the case to HMRC Trusts Bootle where

• A pension under such a scheme is paid in respect of an unmarried minor child

And

• There is doubt that the child has title to the pension

Obtain and attach a copy extract of the rules of the scheme under which the pension is paid.

Non-pension payments

The employee is chargeable to tax in the year the payment is made if

• The payment is not a pension payment

And

• It is not expressly authorised by the rules of an approved or formally approved scheme (EIM74009)

When you become aware of such payments, inform HMRC SPSS (Nottingham) before including the payment in the calculation of the employee’s liability or telling the taxpayer to include the payment in their self assessment.