PSI5.3.18 - Contributions by Employers: Special Contributions - "Hancock" Annuity Purchased Direct from a Life Office - No Ordinary Annual Contribution

(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)

If there is no ordinary annual contribution for comparison because the employer has no pension scheme for its employees, check whether "Hancock" annuities are bought on a regular basis as pensionable employees retire. If so, the cost, even though exceeding £25,000 per annum, may normally be allowed in full for the year of payment if it is not more than 10% of the payroll. But if we are concerned solely with isolated "Hancock" payments, the payroll test is not available and normal spreading principles apply.

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