PSI5.5.10 - Contributions by Employers: Cessation of Trading - Large Contributions Paid to an Existing Scheme when Trading Ceases

(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)

A cessation of trade normally means that the employer's existing schemes will be discontinued because money will not be available to pay the contributions. But, particularly where the scheme members are controlling directors or their relatives, employers sometimes pay substantial contributions to reduce the tax liability of the final period of trading.

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