Form P45: procedures for pension recipients

16 March 2023

The ‘CWG2: further guide to PAYE and National Insurance contributions’ outlines the procedures to be taken for other pension and annuity payers in particular to the form P45. Below are the some of the key points to consider for pension recipients and the form P45.

Pension recipient gives the form P45:

  • include the tax code on the form

  • use the code from the P45 on a W1 / M1 basis until HMRC states otherwise

  • if no contact is received from HMRC by 5 April (or the first pension payment is to be made after 5 April), then the existing code should be carried forward to the new tax year and used on a cumulative basis

  • after the pension or annuity has started and after a code from HMRC has been received, the P45 must be disposed of confidentially

Pension recipient does not give the form P45:

  • unless HMRC instructs to use a new code, use the emergency tax code on a W1 / M1 basis

Taxing pension flexibility payments:

  • deduct tax on the taxable element using the emergency code on a W1 / M1 basis —if a tax code is already held for the current year from the individual’s P45, that code should be operated on a W1 / M1 basis

Death of pension recipient:

  • enter the leaving date (date of death) on the Full Payment Submission (FPS) with the last payment for the deceased, however do not issue a P45

  • if a beneficiary of a deceased employee is to be paid the pension, the procedures under ‘Pension recipient does not give you form P45’ should be followed.

Other processes around pension recipients, commutation and reporting are defined in the employer guidance and can be accessed here.

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