PSI5.3.5 - Contributions by Employers: Special Contributions - Reasons for Spreading

(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 payment of a special contribution is properly justified we have the discretion to allow tax relief either in the chargeable period in which it was paid or to spread it over a number of years (section 592(6)) (see PSI22.4.34). The purpose of spreading is to reduce the tax loss which could occur if employers use special contributions as a means of reducing tax on their profits in a good year. Do not become involved in correspondence about the reasons for our practice: let Technical Support Section see any such enquiry.

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