RPSM05102150 - Technical Pages: Contributions and tax relief: Employer contributions: Transitional issues

Transitional issues

Contributions that received tax relief but were not actually paid before 6 April 2006

Any employer contribution that has been given relief for a period beginning before 6 April 2006 can not be given relief for that period or any other period under s196. In other words tax relief cannot be given twice to the same contribution.

Special contributions that were spread before 6 April 2006

Where tax relief on a special contribution that was paid before 6 April 2006 has been spread forward under section 592(6) ICTA 88 into chargeable periods ending after 6 April 2006, the spread will continue to apply until the first of the following occurs:

• the spread has run its course or
• the employer ceases business.

Chargeable periods straddling 6 April 2006

Where a chargeable period begins before 6 April 2006 but ends on or after that date relief on contributions paid during that period will be given in accordance with sections 196 to 200. This is subject to the transitional provisions mentioned above.

This is because section 9(2) ICTA 1988 provides that the tax rules that apply to a chargeable period are those applying in the year of assessment in which the chargeable period ends. For a chargeable period straddling 6 April 2006 that will be the year of assessment running from 6 April 2006 to 5 April 2007.