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Occupational Pension Schemes

Any sum paid by an employee as a contribution into a scheme approved by the Assessor under the Income Tax (Retirement Benefits Schemes) Act 1978 may be classed as 'superannuation' and be allowed to receive tax relief at source via the employee’s payroll.

  • As income tax relief is given at source, employees should ensure that there is no pension contribution included within their tax code(s). This would lead to a doubling up of tax relief and the possibility of an underpayment on the calculation of their personal tax assessment

Statutory schemes

Statutory schemes are approved by Tynwald and administered by the Public Sector Pensions Authority. These schemes provide pensions for Government employees such as Teachers, Police Officers, Civil Servants, Health Professionals, Firemen and members of Tynwald etc.

Members make monthly contributions into these schemes which are allowed under the Income Tax (Retirement Benefits Schemes) Act 1978 in the same manner as with other 1978 schemes.      

Income tax relief at source for superannuation contributions (Income Tax (Retirement Benefit Schemes) Act 1978.

  • The appropriate amount of employee’s contribution is deducted from their gross remuneration
  • The employee’s tax code is then applied to this net figure and tax is calculated and deducted in the normal manner
  • National insurance is calculated on the figure of gross remuneration paid to the employee, not the net value after the employees’ pension contribution has been deducted from their gross remuneration
  • The total amount of the employees personal pension contributions made during a tax year is then included within Box B of the end of year T14

Example

£2000 Gross monthly remuneration

£200 contribution

The employee’s tax code would be applied to the net remuneration figure of £1800, after the £200 contribution has been deducted from the gross remuneration.

National Insurance would be calculated using the £2000 gross monthly remuneration figure.

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