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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Corporation Tax: management expenses: pension contributions: payment by third parties

FA04/S196 to 199 only apply to payments made by employers and former employers (including sponsoring employers of the scheme).

It would be rare for a company to make a contribution, ‘other than as employer’, which does not fall with FA04/S196 to199, but there are three main situations:

  • Contributions required by the Pensions Regulator
  • Contributions under guarantee arrangements
  • Voluntary contributions

In such cases, the payment should be considered on first principles (is it in fact an expense of managing the company’s investment business since it is not deemed to be so by FA04/S196(3)) to establish whether it qualifies for relief under ICTA88/S75. The timing rules of ICTA88/S75A (CTM08560) will apply in the absence of any other specific timing rule. Also, as it is not a payment within FA04/S196 to S199 then if it is capital in nature it will not be an expense of management.