RPSM05102060 - Technical Pages: Contributions and tax relief: Employer contributions: What is spreading?

What is spreading and why is tax relief spread?

Spreading is where the relief due to an employer on the making of a contribution to a registered pension scheme is not given entirely in the chargeable period in which the payment is made. Instead part of the relief due is spread forward into future periods.

Chargeable period means a period of account where a contribution relates to a trade or profession, and accounting period where it relates to an investment business or to the basic life assurance and general annuity business of a life insurance company.

In order to prevent avoidance of the spreading rules certain payments by an employer are treated for spreading purposes as if they are contributions to a registered pension scheme. For more details see page RPSM05102025.