Pension contributions

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Pension contributions
  • Timing of payments
  • Spreading
  • Pension contributions on sale or cessation of business

Timing of payments

Relief is available for employer’s pension contributions in the accounting period that they are paid, not accrued.

FA 2004, s 196

Where contributions exceed £500,000, there are provisions for spreading the expenses over up to 4 years.

Spreading will apply where the increase in contributions is more than 110% of the contributions paid in the previous period (‘the excess’) and the excess is £500,000 or more.

More on Trading company computations: