RPSM05300100 - Scheme Administrator Pages: Contributions and tax relief: Member contributions – overview: Rules regarding contributions made slightly before/after the beginning of a tax year or pension input period?

What are the rules regarding contributions made slightly before/after the beginning of a tax year or pension input period?

Tax year

You must not treat a contribution as being made in the earlier tax year where:

• payment under a direct debit is due on or after 6 April, or
• payment under a direct debit is re-processed on or after 6 April because it failed to be paid e.g. due to lack of funds, on its original process date in the earlier year, or
• payment was late because a cheque which was presented in the earlier tax year was not honoured and when cheque was re-presented and subsequently cleared it was in the following tax year.

The situation is different if payment under a direct debit was due to be paid on or before 5 April but because the date fell on a Saturday, Sunday or Bank Holiday was not actually processed until on or after 6 April. Providing you hold a fully completed direct debit mandate that shows payment was due by 5 April and it was processed the next working day you can accept the contribution was made in the earlier tax year.

Pension input period

The same considerations will need to be taken into account where a payment is made close to the beginning/end of a pension input period. Here the 5/6 April should be changed to the start/end date of the pension input period.