Commentary

A6.963 Pension contributions

Administration and compliance

A6.963 Pension contributions

A6.963 Pension contributions

HMRC will scrutinise the treatment of pension contributions for tax purposes. Particular danger areas include:

Operation of HMRC's net pay arrangements — an employer with an HMRC-approved scheme will have authority from HMRC to make deductions of employees' pension contributions from their gross taxable pay. This means that tax relief (at all rates) is given via the payroll. The employer must not deduct the employee pension contributions from the gross pay for National Insurance, as the relief is for tax only.

HMRC will check to ensure a valid authority is held and that the deduction has only been made

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