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A GUIDE TO PENSION PAYROLLAugust 2020 1v2 0820IntroductionIncluded in this guide; »Terms used in this guide »Payroll set-up• Tax codes• Tax code letters from HMRC »Payments through RTI »Tax Rate Bands »Tax Refunds »DisclaimerWhen a SIPP member first decides to use some or part of their pension fund for income drawdown, 25% of its value can normally be paid as a tax-free cash lump sum upfront. A pension can then be taken from the remaining 75% subject to tax under PAYE RTI (Real Time Information) rules.In April 2013 HMRC introduced PAYE RTI. This fundamentally reformed Pay As You Earn tax reporting, requiring all UK pension providers to notify HMRC of their liability to PAYE at the time or before they make payment to their pensioners.Payroll software collects the necessary information and sends it to HMRC via the Government Gateway. All pension providers are now required by law to submit an RTI return every time pensioners are paid as part of payroll arrangements.This guide explains how...