PSI5.2.17 - Contributions by Employers: Ordinary Annual Contributions - Commitment to Regular Contributions - Small Self-Administered Schemes
(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)
With small self-administered schemes the actuary often
recommends payment of a particular amount of contribution. This
recommendation does not fix the OAC unless the employer actually
pays the recommended amount each year. For example:
An actuary recommends payment of regular contributions of £40,000. But the actual contributions paid are:
| Year 1 | £100,000 |
| Year 2 | £100,000 |
| Year 3 | £100,000 |
| Year 4 | £700,000 |
The aggregate contributions are the same as if the company had followed the actuary's advice throughout the period. Nevertheless the payment pattern shows that the OAC is £100,000. The balance of the year 4 contribution, £600,000, should be treated as a special contribution and spread for tax relief purposes accordingly (see Section 3 of this Part).
