Published by Trevor Harvey on
This is particularly important following the introduction of Real Time Information (RTI). This was introduced with effect from April 2013 and was one of the biggest changes to hit PAYE since it was introduced.
From that date all but a handful of UK employers and pension providers will have to electronically submit information to HMRC about PAYE deductions as they are made, instead of annually. All employers had to comply by October 2013. It should be noted that for ‘employer’ you should read ‘pension payroll’.
RTI reporting will become an integral part of a pension payroll activity with data being passed on far more accurately and more timely than previously. This necessitates a Full Payment Submission (FPS) being submitted electronically for each pensioner every time a payment is made to them, on or before the payment date shown on the FPS.
Nil returns – or a Nil Employer Payment Summary - are required by the 19th of the following tax month, otherwise it is assumed a payment has been missed and penalties will be levied.
RTI data needed to be submitted from April 2013, with penalties applying to late filing expected to be introduced from 2013/14 – however, in their latest newsletter the Revenue have confirmed that penalties will now be enforced for failing to file PAYE submissions on time:
To avoid such penalties - £100 being the monthly filing penalty per PAYE scheme (for nine or less employees, with an upward sliding scale for more employees), it is important that tax is deducted from any gross pension before the net amount is paid. This can be achieved in one of three ways:-
Remember, National Insurance is not deducted from pensions.