Occasionally we receive queries about how attachments calculate with regard to pension contributions. This is due to a lack of clarity between HMRC and DWP about the definition of a pension contribution and how that should affect the calculation of an attachment.

In Sage 50 Payroll, attachments calculate on employee’s net pay after Tax and National Insurance have been deducted, but not after pension. Sometimes we get queries whereby an Attachment should be calculated after Tax, National Insurance and pension.

This is because there are two types of pension deduction you can have:

• A Pension Contribution – a contribution directly towards a pension scheme
• A Superannuation contribution – a contribution towards a pot of money you would use to buy a pension with when you retire

In Sage 50 Payroll, we only handle pension contributions, not superannuation contributions and there's no option to specify that a pension scheme is a superannuation scheme.

The confusion arises because HMRC and DWP have different advice on what type of pension contributions affect the calculation of an attachment,. There is no clear definition or boundary between pension contributions or superannuation contributions.

HMRC advised Sage that they're currently happy with how we calculate attachments. Once HMRC and DWP can agree, they'll provide a clearer definition and, if required, we'll make any necessary changes to the software.

If you use superannuation scheme, or you need to change the way attachments calculate, a workaround is available. Either:

• Use an alternate attachment type where you can specify a fixed amount, for example 1971 non-priority
• Use a Post-tax Post-NI deduction and manually calculate the value of the attachment and enter this