EIM01570 - Employment income: personal pension arrangements

Sections 308 and 224 ITEPA 2003

Approved and registered schemes

Approved or (from 6 April 2006) registered personal pension arrangements made by an employee (or director) may provide for employer contributions as well as employee contributions. Where, under such arrangements, the employer pays employer's contributions the contributions are not chargeable on the employee as earnings of the employment (Section 308 ITEPA 2003).

If you find that the employer has paid contributions that the employee (or director) was supposed to make, without recovering the full amount from the employee, send a brief report to RISK team at Car Pension Scheme Services in Nottingham. The report should include the following details:

• the name of the employee concerned
• the name and address of the employer
• the name of the pension provider
• the pension plan reference number.

Unapproved and employer-financed retirement benefit schemes

If the employer contributes before 6 April 2006 to personal pension arrangements made by the employee which are not approved arrangements, the amount of the employer's contribution is chargeable on the employee as earnings of his employment (Section 224 ITEPA 2003). Section 244 is repealed with effect from 6 April 2006. There is no equivalent to that Section in connection with employer-financed retirement benefits schemes, so there can be no charge in respect of a contribution after 5 April 2006.

As regards payments received by an employee out of a personal pension scheme, see EIM74009 (for tax years before 2006/07) and EIM74014 for tax years 2006/07 onwards.