RPSM05101340 - Technical Pages: Contributions
and tax relief: Member contributions: Methods of claiming tax
relief: Which schemes can use the net pay arrangement
Which schemes can use net pay arrangements?
A
registered pension scheme can only accept
contributions that have been relieved through net pay arrangement
in 2 situations. These are
Situation 1 – occupational pension schemes
Net pay arrangements may be used if all the following criteria
are met
- the pension scheme is an
occupational pension scheme, and
- the member is an employee of a
sponsoring employer of the pension scheme,
and
- all the other contributing scheme members
who are employees of the same employer are also receiving tax
relief under the net pay arrangement.
We expect most occupational schemes will continue to use the net
pay arrangements for making member contributions and receiving tax
relief.
Situation 2
Net pay arrangements may be used if the following criteria are
met
- the pension scheme is a
public service pension scheme (such as the
Principal Civil Service Pensions Scheme or the Local Government
Pension Scheme) or is a marine pilots’ benefit fund, and
- the member is an employee.
A marine pilots’ benefit fund is
- a fund established under section 15(1)(i)
of the Pilotage Act 1983, or
- any scheme supplementing or replacing such
a fund.
