Commentary

B2.427 Employees—pension arrangements

Business tax
Business tax | Commentary

B2.427 Employees—pension arrangements

Business tax | Commentary

B2.427 Employees—pension arrangements

For HMRC guidance on employer's contributions to a registered pension scheme generally, see HMRC's Pensions Tax Manual at PTM024200.

For corporation tax purposes, a sum paid by an employer in respect of a registered pension scheme may be deducted as an expense of the trade1. However, the amount to be so deducted is limited to the amount paid in the accounting period2, which is a departure from the accounting treatment. It is not sufficient to simply make a reserve for a future anticipated payment, as discussed in Relkobrook Ltd3. Instead, the amount debited to the profit and loss account will need to be added back, and only the contribution paid in the period may be deducted.

The pension contributions must also meet the requirement that they are revenue in nature and

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