Lump Sum pension payments in excess of LTA

In the guidance from HMRC (https://www.gov.uk/government/publications/lifetime-allowance-guidance-newsletter-march-2023/lifetime-allowance-guidance-newsletter-march-2023) it states that; 'As these lump sums will be a one-off payment you will need to issue a P45 to the recipient.' It also says to report the frequency on RTI/FPS reporting as 'One-Off' and to 'Use the date of payment as the leaving date on their payroll record so this is sent to HMRC when you report your payroll information'. Does this mean that this type of lump sum have to be reported on a different payroll record (with different payroll ID) to to the pensioners normal monthly pension payments, or is it possible to pay both on the same record? Obviously this would mean not having a leaving date or reporting them as one-off. If this is possible what would be reported under the FPS item 34 (Annual amount of the occupational pension), would it pay be lump sum amount or the annual rate of pension?

Hi 
We have been unable to find guidance strictly relating to this scenario.
However, using guidance that covers similar scenarios there would be two options for running payroll for this type of payment when the customer is already in receipt of a regular monthly pesnsion.
You can add the pensioner onto the softward with the purpose of making a one off payment and assign a new payroll ID, make the payment and take the appropriate deductions, and then make this payroll ID a leaver and issue the P45.
Our  only concern is that this may cause issues with the indivudals personal tax record. T
There is a small chance that the leaving date entered may cease the incorrect pension source record i.e. the regular payment record or perhaps cease both in error.
The second scenario would be to report the lump sum on the existing payroll records and issue the customer with documentation, providing the information that would be on a P45 i.e. Gross Payment and deductions.
This is ultimately your decision, either way would be acceptable by HMRC. 
Thank you. 

Thanks for the reply, Would I be right in thinking if the pensioner were paid on the Lump sum on the existing pension record, FPS item 34 (Annual amount of the occupational pension), would either be populated as normal with the annual pension rate (if we were reporting them as a new starter), or left blank (if we had already reported them as a new starter)? The guidance I linked on my original query suggests putting the lump sum amount in this field but, I would assume this would only be the case if using a separate/one-off record for the lump sum? Thanks

Hi David Ralph,
To discuss this further and in more detail we would suggest contacting us here:
Employers: general enquiries
Thank you.