Back to basics: Tax relief for employer pension contributions

Tax relief for employer contributions to a UK registered pension scheme is governed by normal corporation tax deductibility principles subject to two main modifications. First, relief is available only for contributions actually paid. Second, there is no blanket restriction on deductibility for payments of a capital nature. The timing of deductions can, however, be affected by the spreading rules. Contributions to non-registered schemes (commonly used to provide group life cover to employees) are deductible in accordance with normal (unmodified) corporation tax principles. Depending on the structure of the arrangements, deductions can, however, be deferred (and ultimately denied) if sufficient qualifying benefits are not paid out of the non-registered scheme.