Preparing for the end of Contracting-out or the beginning of contracting- in 18 November 2015 Looking ahead to the 2016-2017 tax year, a year that will herald the introduction of the Single Tier State Pension, employers who currently operate current contracted out DB schemes will need to be checking that they are ready to transfer out of processing contracted-out NICs. If your software hasn’t already been tested to ensure a smooth transition from the use of contracted-out category table letters to the use of the equivalent not contracted–out table letters, the following conversion table, produced by HMRC’s Software Developer Support Team, might prove helpful to you:
Description Standard Rate Reduced Rate Deferred Rate
Category in March 2016
Category in April 2016
D E
A B
L
J
Standard Rate (Under 21) Deferred Rate (Under 21) Standard Rate (Mariner) Reduced Rate (Mariner)
I
M Z R T Y
K N O
Standard Rate for Mariner Under 21 V
Previous News on the subject of Contacting–out can be found in the current and previous editions of the CIPP Policy News Journal or
Employer Actions for the end of Contracting-out Changes due to the end of Contracting-out Abolition of salary related Contracting-out
Why should you use the Scheme Reconciliation Service? 24 December 2015
Why you should use the Scheme Reconciliation Scheme (SRS) and the answers to many other questions relating to the topic of the end of Contracting Out can be answered by reading the latest issue of the Countdown Bulletin.
With only three months to the end of Contracting Out, pension scheme administrators and trustees are reminded that they have only three months left to register to use the Scheme Reconciliation Service (SRS). Registration should be complete by no later than 5 April 2016.
By not reconciling non-active members, Pension Schemes may:
see an increase in contact from individual members not have the total funding to meet their GMP liability obligations be at risk of under or overpaying GMP’s not be aware of their GMP liability
Full details of Pension Scheme Reconciliation Service can be found at GOV.UK.
The bumper Christmas edition of Countdown Bulletin also goes on to provide detail on a range of topics related to the end of contracting out. As we countdown towards Christmas, we also get ever closer to the end of contracting out – are you ready?
Abolition of contracted-out rebate and reporting requirements 12 January 2015
The abolition of contracted-out rebates from 6 April 2016 means that employers will need to report less earnings information to HMRC. A Tax Information and Impact Note (TIIN) has been published detailing the changes.
CIPP Policy News Journal
25/04/2016, Page 356 of 453
Made with FlippingBook - Online magazine maker