PSI5.1.38 - Contributions by Employers: General - Contributions by Employers Assessed under Schedule E - Contributions by Employers which are Charities

(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)

Many charities do not trade as the tax exemption rules for trading profits are somewhat restricted. Where a charity does trade however it is entitled to the normal deductions in computing its trading profits. FICO deals with all such matters centrally. Because of the restrictions some charities set up wholly-owned subsidiary companies which then covenant the whole of their taxable profits to the charity. The trading subsidiaries are dealt with by local Tax Districts but there are plans to transfer these to FICO from 1 December 1995. (See PSI22.3.33-35 for the procedure to follow on receipt of an application for approval of a scheme set up by a charity.)

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