PAYE76110 - PAYE operation: pensioners: pension paid by employer to retired employee

An employer paying pensions to retired employees is required to tell HMRC the following, within 14 days of an employee's retirement

• The employee's name and NINO
• The date of retirement
• The cumulative earnings at the date of retirement or pay in `this employment' if different
• The total tax in ‘this employment’ to date of

The employer is also required to operate the existing code on a Week 1/Month 1 basis until fresh instructions are received.

A form P160 is normally used but you may accept the employer's own form or informal notification as long as it gives this information. Form P45 is not appropriate in this situation and you should encourage the employer to follow the advice given in the Employer Further Guide to PAYE (CWG2).

The P160 is a two part form. The employer gives a copy of the form or the informal notice to the employee.

All new pensions must be notified irrespective of the amount of the pension or of the age of the pensioner. Offices should not enter into different arrangements with pension payers.