PSI5.4.3 - Contributions by Employers: Approved Schemes Tax Treatment - Ordinary Rules of Schedule D

(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)

Section 74 ICTA 1988 gives guidance on what may be allowable as a deduction in computing the profits chargeable under Cases I or II of Schedule D. In particular, the Inspector will want to see that any pension contributions were paid away or clearly alienated from the employer's other assets. The employer must also show that the payment was made wholly and exclusively for the purposes of earning the profits of the trade.

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