Guidance on moving pension holders between payrolls issued by HMRC

01 November 2019

HMRC has advised, within Pension schemes newsletter 114,  that it will publish finalised guidance surrounding moving pension recipients from one payroll to another, and have provided some draft advice to follow in the interim.

In the alert, HMRC has stated that the instructions already provided are subject to change, but those changes will be minor in nature, so the provided guidelines are a good indicator of how to proceed.

Payroll administrators will need to set up a new PAYE reference and:

  • Transfer the payroll records to the new employer reference
  • Send a Full Payment Submission (FPS) under the old employer reference with leaving details, including the year to date pay and tax figures. P45s should not be prepared
  • Send an FPS under the new employer reference restarting the year to date figures from zero, put the full starting details for each recipient on the FPS for the new reference and include the:

                               - start date for the new payroll

                               - annual amount of their pension

                                -occupational pension indicator

  • leave the occupational pension bereavement field on the FPS blank, unless paying the pension to a dependent who’s been bereaved since the pension recipient joined the new payroll
  • work out and deduct PAYE tax from any payments made to the transferred pension recipients from the date they moved payrolls
  • If operating a cumulative tax code, use the pay and tax details from the old employer reference

Further advice states that a final FPS needs to be submitted from the old reference prior to submitting the first FPS for the new reference. There is help available from HMRC’s Employer Helpline should this be an issue.

The Employer Helpline should be contacted a minimum of two months before the scheduled transfer date when moving members in receipt of pension payments from one payroll to another under a new PAYE reference, if they:

  • Receive more than one pension under the existing PAYE scheme which are paid under separate payroll IDs and this arrangement continues under the new PAYE scheme
  • Have multiple pensions paid under one payroll ID at the old reference but will be paid under separate payroll IDs at the new reference
  • Have a suffix code T (e.g. 0T & NT)
  • Are paid in advance and the month 12 FPS shows an end date which falls in the following tax year, e.g. a pay date of 01/04 and an end date of 30/04

HMRC will contact affected employers within 15 working days to ask for further information to review whether revised tax codes need to be issued after the transfer has been completed.


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