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HMRC internal manual

PAYE Manual

PAYE operation: pensioners: basis of charge

Pensions are chargeable on the entitlement for the year rather than the amount actuallyreceived. Usually these two amounts will be the same but there are some exceptions

  • An occupational pension is paid in advance. The Employment Income Manual tells you what to assess when a pension is first received and in the year of death
  • Overpaid state pension is recovered by the Department for Work and Pensions (DWP). See PAYE76135 for further information
  • The pensioner draws state pension 4 or 12 weekly in arrear. The Employment Income Manual tells you how to assess this