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HMRC internal manual

Business Income Manual

Specific deductions: pension schemes: introduction

This guidance outlines when a contribution to a registered pension scheme by an employer or former employer or another party is allowable as a deduction in computing their trade profits for tax purposes. It applies to contributions made on or after 6 April 2006. For guidance on registered pension schemes generally, see the Pensions Tax Manual.

‘Employer’ for this purpose includes a ‘sponsoring employer’ of a multi-employer or group pension scheme. Most multi-employer schemes will have the majority or all group members as participating sponsoring employers. Further guidance on contributions by sponsoring employers to multi-employer schemes is at BIM46020 and BIM46065.

Guidance on contributions to registered pension schemes by third parties (that is other than by an employer, former employer or sponsoring employer) is at BIM46070.

For contributions made by companies which are not carrying on a trade, guidance on deductions for management expenses is at CTM08340.