PSI5.1.9 - Contributions by Employers: General - Cross- Subsidisation

(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)

[PN21.3]

Cross-subsidies do not, however, normally matter where the participating employers are associated with one another (as defined in section 590A(3) and (4) ICTA 1988. We are also not concerned with cross-subsidies in the case of employers associated with one another by virtue of a permanent community of interest (see PSI21.2.3) where ordinary arm's length employees are involved. Where, however, in the case of the latter type of association, controlling directors are involved, the funding of benefits for such individuals must be on the basis that each employer contributes only in respect of its own director employees and these contributions should be related to the director's salary and service with that participating employer.

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