from 6 April 2016 you will not be able to use your Contracted-out Salary Related (COSR) occupational pension scheme to contract employees out of the new State Pension scheme. there will no longer be a requirement to report the Employers Contracting-out Number (ECON) and Scheme Contracted-out Number (SCON) details on Full Payment Submission (FPS) for tax years commencing 6 April 2016 and onward. there will no longer be a requirement to separate the National Insurance (NI) earnings between the Primary Threshold (PT) and Upper Accrual Point (UAP) & UAP to Upper Earnings Limit (UEL). there will be a requirement to report NI earnings between the PT to UEL as there was prior to 2009. there will be one less column to complete on the form P60 which will be updated in due course and will be available on the Basic PAYE Tools or can be ordered from the Employer order line.
All HMRC systems will be amended to reflect these changes and the UAP data field will be removed from the FPS and Earlier Year Update (EYU).
All payroll software will need to be amended as going forward in to the 2016-17 tax year it has been confirmed that FPS submissions will be rejected in the event they contain contracted out NI categories.
National Insurance Categories from 6 April 2016 Contracted-out National Insurance tables/categories D, E, I, K, L, N, O and V will be replaced by Standard National Insurance tables/categories A, B, J, M, P, Q, R, T, Y and Z. National Insurance Categories from April 2015 for employees under age 21 Contracted-out National Insurance categories I, K and V will operate for the 2015-16 tax year only for individuals who are aged under 21 and are in a contracted-out pension scheme.
To help us understand awareness, please take a moment to complete our CIPP Poll on our home page (bottom right) which asks:
Are you aware that FPS submissions will be rejected in 2016-17 if contracted-out categories are used?
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CIPP Policy News Journal
25/04/2016, Page 41 of 453
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