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HMRC internal manual

Employment Income Manual

Employer-financed retirement benefits schemes: application for relief where no benefits paid or payable

Section 392 ITEPA 2003 and Paragraph 52 Schedule 36 FA 2004

[Notice: the guidance on this page should be read with the notice at the top of EIM15015]

Repayment of tax may be made in some circumstances if an employee does not receive benefits from an employer-financed retirement benefits scheme. If an employee has been charged under Section 386 ITEPA 2003 or Section 595 ICTA 1988 on employer contributions made to provide relevant benefits (following EIM15412 ) and the employee shows that:

  • some event has subsequently occurred by reason of which no relevant benefits will become payable (for example, the scheme folds) and
  • no payment has been received by the employee in respect of or in substitution for those benefits

then relief may be claimed.

‘Employee’ for this purpose includes a person who has been an employee and benefits are provided in respect of benefits if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives (Section 386(6) ITEPA 2003).

Application for repayment must be made by the employee or by the employee’s personal representatives within six years of the date on which the event occurred. Relief is given by discharge or repayment of the tax paid.

Note 1: Although Section 392 ITEPA 2003 was repealed with effect from 6 April 2006, transitional relief continues to apply after 5 April 2006 provided that tax has been charged under Section 386 ITEPA 2003 or Section 595 ICTA 1988 before 6 April 2006

Note 2: This relief does not apply if the reason no benefits will be paid, or the event, is concerned with a reduction of an employee’s rights as a consequence of a pension-sharing order (Section 392(6) to (7) ITEPA 2003).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)