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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Non-approved schemes: example: assessment of employer's contributions

Section 386 ITEPA 2003

Note: Section 386 ITEPA 2003 is repealed with effect from 6 April 2006 (see first bullet point of the final paragraph at EIM15400)

Example 1

On 1 January 2006, a company pays £100,000 into a trust set up to provide retirement benefits for Mrs A, an employee. The scheme is not approved (see EIM15407).

The PAYE Regulations do not apply (see EIM15433) and the trustees receive £100,000. The payment is entered on form P11D (see EIM15431).

£100,000 is included in Mrs A’s self assessment computation for 2005/06 (see EIM15411) as employment income.

Example 2

On 1 January 2006, a company pays £100,000 into a trust set up to provide retirement benefits for all its 500 employees. The scheme is not approved (see EIM15407).

Each employee includes £200 in his or her self assessment computation for 2005/06 (see EIM15411) as employment income.

See EIM15412 for background.