Pension Schemes – Pensions earnings cap and the transitional periodMonday, March 2nd, 2009
Pension scheme trustees may continue to use the pensions earnings cap, which officially ceased to exist from 6 April 2006, for the purpose of restricting pension payments from a registered pension scheme for a transitional period. The transitional period ends on the earlier of
- the date from which the pension scheme rules are changed so that the existing limits no longer apply, and
- the end of the 2010/11 tax year.
Although the earnings cap, fixed at £105,600 for 2004/05, has not been increased in legislation since April 2006, HMRC continue to review it annually for these transitional purposes. The notional value of the pensions earnings cap is increased from £117,600 for 2008/09 to £123,600 for 2009/10.
Notional Earnings Cap 2009/10
The UK Payroll News is sponsored by HRD & Payroll Solutions