P45 and P46(Pen) Procedures – Notifying new pensioners from April 2009Sunday, September 7th, 2008
Last week’s newsletter provided an overview of the new form P46(Pen) Notification of pension starting and how it will be used from April 2009. HMRC’s intention has been for the form to be used in all cases to report the tax code used by a pension payer (former employer or otherwise) for a new pensioner.
Current PAYE procedures require a form P160 Retirement statement to be completed when an employee starts to receive a pension from the former employer. The employer must not complete a form P45 in that situation. However, where a pension payer that is not the former employer starts to pay a pension and the new pensioner provides a P45 (Parts 2 and 3), the pension payer must complete Part 3 and send it to HMRC. If the new pensioner does not provide a P45, the pension payer completes a form P46 instead.
From April 2009, form P46(Pen) should be used in both of those situations. The pension payer, whether or not the former employer, should send a P46(Pen) or its online PENNOT equivalent for every new pensioner. A pension payer should not send a P45 Part3. There is no provision on the online version of form P45 Part 3 to indicate that it relates to a new pensioner.
However, HMRC’s problem is that the requirement for a pension payer to send a P45 Part 3 if the new pensioner provides a P45 has not been removed from the regulations. Until that is done, unlikely before April 2009, HMRC is asking for a P46(Pen) to be issued in every case, even though there is not a statutory basis for the procedure.
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