How do you calculate how much to deduct and pay to NFU Mutual?

It is your responsibility to ensure that the relevant fixed amounts or percentages of pay (if applicable) have been calculated correctly and that any contributions are forwarded to NFU Mutual.

Any contributions paid by the employee must be paid to NFU Mutual net of basic rate income tax. For example, if an employee chooses a gross monthly contribution of £100, you would actually deduct £100 less basic rate income tax monthly from his net pay and pay this to NFU Mutual. For example, currently the basic rate of income tax is 20% and so the net amount would be £80.

NFU Mutual will then claim the income tax relief at the basic rate for all employees' contributions and the HM Revenue and Customs will send these tax refunds directly to NFU Mutual. Higher rate taxpayers must claim the balance of tax relief due to them via their annual tax return.

Employer contributions must be paid gross.

What do I do if the contribution is more than the employee's net pay?

Personal pension and stakeholder pension contributions are classed as voluntary deductions so they must be deducted from employees' pay after tax, National Insurance and other compulsory deductions. Tax credits such as Working Families' Tax Credit do not count as pay and cannot be used to pay payroll contributions to a personal pension or Stakeholder Pension Plan.

If there is insufficient net pay to make the full deduction, then you can arrange for as much as the employee can afford, providing that you, the employee and NFU Mutual all agree to this.

Are there any time limits for making payments to the NFU Mutual personal pension or Stakeholder Pension Plans?

Yes. There are set time limits for paying over the employees' and any employer's contributions to a pension scheme.

You must pay over your employees' contributions to NFU Mutual within 19 days of the end of the month in which the payroll deduction was made.

For example, deductions made in February will have to be paid by the statutory due date of 19th March at the latest, regardless of how often you actually make the payroll deductions from your employees.

If you also contribute to the scheme, you can have a separate statutory due date for your own contributions. However, once you have chosen the date you must stick to it. You might therefore find it easier to have the same dates for both your employees' and your own contributions.

It also makes sense to pay contributions over to NFU Mutual as soon as possible so that if there are any problems they can be sorted out before the statutory due dates.

What records must I keep?

You must keep up-to-date records of the amounts and the dates of contributions from your employees and yourself. You must also specify the statutory due dates and send details to NFU Mutual.

If there are changes to any of the amounts, or if any individuals are added to or removed from the payroll deduction facility, you must update the record and send a copy to NFU Mutual as soon as possible and before the next contribution payment date.

NFU Mutual will then send you an updated schedule of payments for your records.

Who monitors the payments I make?

NFU Mutual monitors the payments you make using the schedules of payments that you send to us to check that the correct payments are made and that they are received by the due dates.

NFU Mutual is required to notify the Pensions Regulator (TPR) if payments are later than the statutory due dates, are not made or are incorrect. TPR will then investigate the reason.

It is an offence for which you may be fined or taken to court if you do not:

• Set up a record of the payments you make to NFU Mutual
• Keep the record up-to-date
• Send a copy of the record to NFU Mutual
• Tell NFU Mutual about any changes to the record and send an amended record
• Make the correct payments on time

What happens when I set up a scheme?

An application form must be completed for each employee who wishes to join your scheme, which will include all the contribution details required under the new legislation.

Upon receipt of the application form, NFU Mutual will then check the application to make sure that everything is in order and when this is done we will contact you to agree a commencement date. We will then send you a formal schedule of contributions, for your records you should not commence deduction of contributions from your employees' pay until this has been completed and you must ensure that any payroll deductions agree with the schedule of contributions that we send you.

What happens if I want to make a change?

Give us a call on the Freephone number 0800 622 323 or write to us to explain what changes you want to make. If you want to admit a new member to the scheme a full application form must be completed.

As before, NFU Mutual will check the details to make sure that everything is in order and when this is done we will contact you to agree an effective date. We will then send you a revised schedule for your records.

Your enquiry may result in a call from an NFU Mutual Financial Consultant, who advises on NFU Mutual products and services, and in special circumstances those of other providers. For security and training purposes telephone calls may be recorded and monitored.