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Hi Sam, I posted a question earlier on today, and was hoping

Resolved Question:

Hi Sam,
I posted a question earlier on today, and was hoping for your response given your experience and credentials but another expert got to post the answer (plus I am new to just answer).

The question is as follows:
In the HMRC pension manual it indicates that pension contributions are a deductible against corporation tax on a ‘paid’ basis. However there is no definitive answer to what a paid basis is.

If a pension contribution to a registered pension scheme was made well within the end of the fiscal year, and the pension provider has provided documentation to confirm the premium was also paid. In addition they have invested the funds, and commenced the policy.

Nonetheless, if the funds do not clear by the end of the fiscal year, will the contribution be deductible as an expense in the year it was paid and implemented by the pension provider, or the year it was cleared?

There seems some speculation on this that paid means cleared, or at the point it was paid to the provider the same as when HMRC receive payment for tax. Having contacted HMRC two individuals in the pensions departments, and one in corporation tax helpline indicate as payment was received before the end of the year it should be deductible. Please help.


Optional Information:
System of Law: England-and-Wales

Already Tried:
I have looked around on the web on taxation forums where there are differences in opinion. Spoke to accountant who said it means cleared from the company accounts, but then contacted HMRC two people in pensions department, and one in corp tax said it should be deductible. Still awaiting to hear from local inspector.
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi

Thanks for your question and asking for me and I am sorry another expert did not leave the question for me to answer. Sometimes this does happen

But in answer to your question the payment is deemed to have been paid at the date you made the payment, not when the payment has cleared, and sanctioned by HMRC

So I agree with HMRC and the advise offered so far

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13777
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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