PAYE77035 - PAYE operation: incapacity benefit: form P45(IB)(O)

Form P45(IB)(O) is used to notify the termination of taxable Incapacity Benefit for cases where Incapacity Benefit has been coded out. In addition to the date of cessation, it shows the total taxable benefit for ‘this’ claim since 6 April.

The P45(IB)(O) is printed on white paper and should not be confused with the P45(1)IB which is printed on yellow paper. This form can be captured through the DATA CAPTURE screens. For more information see ‘Capturing in-year forms (Action Guide)’ at PAYE60021.

When a P45(IB)(O) is received you should review the coding deduction and amend as necessary. The reasons for benefit ceasing are normally

• Claimant passed fit for work
• Claimant reaching state pension age
• Death of claimant (when `D' is shown in the Deceased box on the form)

Note: You should always check to see if the Incapacity Benefit is to cease because the individual is reaching state pension age and will be receiving state pension. If so, you should apportion the Incapacity Benefit to the date of cessation at the same time as entering the state pension.