Specific deductions: pension schemes: Pensions Act levy
S199 Finance Act 2004, The Pension Protection Fund (Tax) Regulations 2006, SI 2006 No 575, Regulations 20, 21
An employer may be required to pay a statutory levy (a ‘Pensions Act levy’) to the Pension Protection Fund or the Fraud Compensation Fund in relation to a scheme eligible for protection by those Funds. For further details on these, see RPSM05102050.
A payment of a Pensions Act levy is deemed to be a contribution to a registered pension scheme and so the rules at BIM46005 apply:
- The payment is an everyday cost of employing staff, in the same way as the pension contribution itself. In the case of a continuing trade the payment is an allowable deduction in computing the employer’s trade profits for tax purposes in the period when paid.
- A payment made after the trade has ceased is treated as being paid on the last day of trading.
A Pensions Act levy is not, however, subject to spreading (see BIM46010).