(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)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
In addition to their main employment some people are also
directors of other unassociated companies. Sometimes the conditions
of the main employment require the employee to pay over the fees
received from these directorships to the main employer. This
channelling of remuneration is known as "canalisation". In return,
remuneration from the main employer may be increased and retirement
benefits related to this increased figure. Such increases for
controlling directors are to be excluded from final
remuneration.
