Fund Split PAYE Creditors

If pension payments are paid via a payroll bureau then the whole pension will often be deducted from the scheme as one gross payment and there will be no need to allow for PAYE creditors.

However, if the scheme makes a net pension payment and then settles the PAYE later then the PAYE becomes a creditor of the scheme. The PAYE is a liability of the scheme as soon as the net pension is paid to the member even though the tax will generally be paid just before the 19^th in the following tax month.

When the investment valuation is run, Omni will deduct the PAYE due for all pensioners from the net asset value.

The fund split calculations will allow for the PAYE for each member, as follows:

1. For each member, Omni will find all PAYE where the ‘Pay Day’ was on or before the ‘Fund split end date’ and the PAYE has not yet been paid (i.e. expected transactions when the fund split is run)

2. Similarly, Omni will find all PAYE where the ‘Pay Day’ was on or before the ‘Fund split end date’ and the date of payment of the PAYE is after ‘fund split end date’ (i.e. the transactions have been imported when the fund split is run) .

3. The creditors are summed across all members.

4. The total is added back to the total net asset value because the investment valuation will have deducted the creditors already.

5. This increased fund value is split between the members in the normal way.

6. After the main calculations, the PAYE creditors for each member are deducted from the calculated share of fund

7. The values after deducting the creditors are stored so that they can be used for BCEs and pension limit calculations.

8. The PAYE creditors that have been deducted for each pensioners are stored so that they can be allowed for in the next fund split.

9. When the next fund split is run, the PAYE creditors that were allowed for at the end of the last fund split are retrieved and added back to the stored fund split for each member

10. The PAYE creditors will have become actual tax transactions and will be allowed for in the fund split in the same way as normal pension payments

Member Subfunds

If the Omni PAYE module is used then the expected transactions for the PAYE will be generated automatically when processing the payroll. This will include the split of the tax between the subfunds (pre 2006 pension, normal pension and transfers in drawdown). If the Omni PAYE module is not used then the expected transaction for the PAYE will need to be added manually by the user – the split of the tax between the subfunds will need to be added.

NB The above process will not work if the Pay Day field has not been entered for a pension tax payment because Omni won’t know when the tax liability was crystallised.

Back to main Fund Split help.