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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Employment maintenance: filing online: employers: automatic record update for new pensioners

There are two distinct processes associated with a P46(Pen) transaction, specifically

  • Previous employment details
  • New pension details

This subject is presented as follows

General

This process does not apply to the State Retirement Pension. It covers pensions paid by insurance companies and former employers.

A non RTI employer sends P46(Pen) notifications online and these take the place of paper forms P46, P45 Part 3 or P160.

An RTI employer sends notification of a pension employment commencing on their employees Full Payment Submission (FPS) by completing start date, starting declaration B and an annual pension amount.

The processes work as follows.

Previous employment details - non RTI employer

The P46(Pen) transaction contains the following details relating to the previous employment if appropriate

  • PAYE reference number
  • Date of leaving
  • P45 Part 3 pay and tax
  • P45 Part 3 code

When a P46(Pen) transaction is received the PAYE Service will automatically try to match the previous employment details to an existing employment held on the individual’s record.

If the previous employment details are successfully matched to a live period of employment the individual’s record will be updated to show it has potentially ceased.

If the previous employment details cannot be matched to an employment on the individual’s record a matching period of employment will be created and potentially ceased.

A primary record will be created on the individual’s record displaying

  • PAYE reference number
  • Creation source - PENNOT
  • Date of leaving
  • Potentially ceased indicator

The employment start year will be determined by the employment end date and recorded as the tax year commencing. For example, an employment which commenced between 6 April 2008 and 5 April 2009 will be recorded as 2008.

New pension details - RTI and non RTI employer

The FPS or P46(Pen) will contain the following details relating to the new pension

  • PAYE reference number
  • Date of commencement
  • Works number
  • Occupational pension / Bereavement indicator or new widow indicator
  • Annual Pension amount

When an FPS or P46(Pen) is received the system will try to match the new occupational pension details with an existing pension held on the individual’s record. If no matching pension record is held the system will insert a new primary record when

  • No live primary employment exists

The new primary record will be populated with

  • PAYE reference number
  • Works number
  • Pension start date
  • Creation source - PENNOT or RTI
  • OCPN indicator will be set
  • Estimated pay will be updated

A new secondary record will be created if a live primary employment is held and the new pension employment cannot be matched to the live primary or a live secondary employment.

The new secondary record will be populated with

  • PAYE reference number
  • Works number
  • Pension start date
  • Creation source - PENNOT or RTI
  • Occupational signal will be set
  • Estimated pay will be updated

Note: Contact History will automatically be updated for each P46(Pen) or FPS transaction that is successfully processed through Create employment.

Automatic issue of tax code calculation - RTI and non RTI employer

NPS will trigger an automatic tax code calculation when

  • A secondary employment is created from a P46(Pen) or FPS

And

  • The recently bereaved indicator is not set

Where a secondary employment is created from a P46(Pen) and the Recently Bereaved indicator is set an automatic tax code calculation will not be triggered.

Automatic issue of P161(W) - RTI and non RTI employer

Before 18 March 2015, when an FPS or P46(Pen) was received and either a primary or secondary record was created, if the Occupational pension / Bereavement indicator or New widow indicator was set on the transaction then

  • A P161(W) will have automatically been issued (automatic issue of this form has now ceased and it will be decommissioned in July 2015).