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HMRC internal manual

Pensions Tax Manual

General principles: overview of pensions taxation: contributions


Glossary PTM000001


Other persons

Contributions to registered pension schemes can be made by scheme members, employers and/or other persons.


Members of registered pension schemes can make unlimited contributions to those schemes in a tax year but there is a limit on the amount of contributions that will receive tax relief based on:

  • the greater of £3,600 and the amount of the member’s relevant UK earnings, and
  • the annual allowance.

To qualify for tax relief a contribution must be a relievable pension contribution made by:

  • a relevant UK individual, who is
  • aged under 75.

Further guidance on member contributions can be found at PTM044000.


An employer of a member of a registered pension scheme can make contributions to that registered scheme. Unlike members, there is no set limit on the amount of tax relief an employer may receive on its contributions.

Tax relief on employer contributions is given by allowing them to be deducted as a business expense (although not automatically) therefore reducing the employer’s taxable profit. PTM043000 sets out further guidance on employer contributions and tax relief.

Employer contributions are not a taxable benefit

Sections 307 & 308 Income Tax (Earnings and Pensions) Act 2003

Where an employer makes death or retirement provisions under a registered pension scheme for an employee, the provision of that benefit is exempt from tax for the employee.

The contributions an employer makes to a registered pension scheme on behalf of an employee are also exempt from being taxed as earnings for the employee. However, the employer’s contributions will count towards the member’s annual allowance limit, so the member may have to pay tax if the employer contributes too much.

Other persons

A person other than the member or the member’s employer can make contributions to a registered pension scheme in respect of the member. The other person can be an individual, corporate body or other legal entity.

For tax purposes, the other person’s contributions will be regarded as if they were made by the member. The member therefore receives any tax relief on the contributions, whereas the person who actually made the contributions will not be entitled to relief on them. The guidance on member contributions at PTM044000 applies.