(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
It is sometimes claimed that periods of service for which no
remuneration was payable should be counted as pensionable. "Service
as an employee" in section 590(2)(a) ICTA 88 implies a contract of
service, which cannot exist without consideration, ie remuneration,
passing to the employee. So any period for which there is no
entitlement to remuneration as an employee cannot normally be taken
into account for the accrual of benefits under an approved scheme.
The situation is different in the case of directors who are deemed
to be employees by section 612(1) ICTA 1988 irrespective of whether
remuneration is paid to them. A director must, of course,
ultimately be in receipt of remuneration in order to have a measure
of final remuneration (see Part 6 Section 4) on which benefits can
be based.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
Any case where it is contended that unremunerated service
other than as a director should count for benefit purposes should
be referred via the Divisional Manager to Technical Support Section
for advice.
