PSI4.1.8 – General: Temporary Absence - Contributions During Absence

(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)

[Pn4.6]

If the scheme rules permit, an employee may remain in a scheme whilst temporarily absent from service (see Part 3). In these circumstances the employee’s contributions may be either suspended or continued. If they are continued they should not, where the employee continues to be paid, exceed 15% of his or her remuneration for the year from the employment being pensioned. Where the employee is not paid or receives reduced pay in respect of the employment for the period of absence, contributions should not exceed 15% of what would have been the employee’s remuneration for the year, in respect of that employment, if he or she had not been temporarily absent. However, tax relief under section 592(7) can only be allowed for the year of assessment in which the contribution is paid and is restricted to 15%, or such higher percentage as the Board in a particular case may prescribe (see PSI4.2.17), of the employee's remuneration for that year from the employment being pensioned. It follows that no relief can be given if contributions are paid whilst no remuneration is actually received.

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