PSI4.2.7 - Tax Relief: Earnings Cap

(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)

Secondly, Finance Act 1989 introduced the permitted maximum (see Introduction 4.15b) upon remuneration for employee contribution purposes to all exempt approved schemes - section 592(8B). Thus for employees other than those with continued rights (see PSI2.3.23), tax relief on their contributions is restricted to 15% of the permitted maximum in relation to all employments being pensioned whether under one or more schemes and irrespective of whether the employees are associated or unassociated.