This guide is for financial advisers only. It mustn’t be distributed to, or relied on by, customers. It is based on our understanding of legislation as at February 2025.
Employer contributions to any type of pension arrangement in a registered pension scheme are always paid gross. Corporation tax relief for employer contributions is not automatic. Instead, it is given at the discretion of the local Inspector of Taxes (that is, the employer’s local tax office). Tax relief is given by deducting the gross amount of the contributions from an employer’s taxable profits before corporation tax is calculated.
For a trade or profession, employer contributions are deductible if they are incurred wholly and exclusively for the purposes of the trade or profession. For an investment company, employer contributions are deductible if they are classed as an expense of management.