RPSM05200060 - Members Pages: Contributions and tax relief: Member contributions -overview: What earnings can I base my contributions on

If I make a contribution what earnings will attract the tax relief I may be entitled to?

Tax relief is limited to 100% of an individual’s relevant UK earnings. Therefore you may need to establish how the various payments you may receive as part of your earnings have been taxed. The following earnings are relevant UK earnings:

• income chargeable under Part 2 ITTOIA 2005 immediately derived from a trade, profession or vocation (whether individually or as a partner acting personally in a partnership)
• employment income such as salary, wages, bonus, overtime, commission providing it is chargeable to tax under Section 7(2) ITEPA 2003
• any part of a redundancy payment which exceeds the £30,000 tax exempt threshold under section 403(1) ITEPA 2003.
• benefits in kind which are chargeable to tax (applies to employees earning over £8,500, and to directors)
• profit related pay (including the part which is not taxable)
• Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP) provided it is paid by the employer and chargeable to tax under Section 7(2) ITEPA 2003
• Permanent Health Insurance (PHI) payments paid by the employer whilst you are still in employment
• salary paid by way of Government Securities
• remuneration paid in the form of units in an authorised unit trust provided it is treated, on receipt, as a taxable emolument of the individual
• patent rights treated as earned income under section 833 (5B) ICTA 1988
• general earnings from overseas Crown employment which are subject to tax in accordance with Section 28 of ITEPA 2003
• amounts deducted from salary to purchase partnership shares in a share incentive plan provided they qualify as such under paragraph 83 of Schedule 8 of Finance Act 2000

This list is not exhaustive.

For the avoidance of doubt a pension is not classed as earnings and cannot be included in the definition of relevant UK earnings.