(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)
The adequacy of the employer's contribution to a scheme
funded by a salary sacrifice does not normally cause problems. The
contribution paid in connection with the salary given up is an
employer and not an employee contribution where
the salary sacrifice is effective. But close scrutiny is needed if
the Inspector reports that the salary sacrifice is ineffective (
PSI4.1.14). The employee will
not have lost title to the salary given up and the money paid to
the scheme is thus an
employee contribution. Approval will be prejudiced
unless the employer pays sufficient money into the scheme in
addition. Follow the normal guidance in
PSI5.1.17-23 when considering the
adequacy of the employer's contribution.
