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Use the Pension (defined contribution) template to give tax relief for employer contributions to a defined contribution (money purchase) pension scheme. Relief is given on a paid basis, so the template adjusts the accounts charge to the amount actually paid, and applies the spreading rules where a large increase in contributions must be relieved over more than one period.

Table of contents 

When should I use this template?

Use it where the company contributes to a defined contribution pension scheme. The amount charged in the accounts may differ from the amount paid, and the template makes the necessary adjustment.

Before you start

A business type must be selected in the Business type section of the Return information template. If none is selected, the template shows a warning and cannot calculate.

Background: paid basis and spreading

Employer pension contributions are deductible only in the period in which they are paid. In addition, where contributions increase substantially compared with the previous period, the excess may have to be spread forward and relieved over up to four years rather than all at once.

Working through the template

For each scheme, complete:

  • Description — the scheme.
  • (Asset) / liability b/f — the opening prepayment or accrual.
  • P&L / OCI charge / (credit) — the amount charged in the accounts.
  • (Paid) / received in period — the amount actually paid.
  • Other — any other movement.
  • (Asset) / liability c/f — the closing prepayment or accrual.

Below the main table there is a pension spreading table. Where spreading applies, record the creation of spread (the amount deferred from the current period) and the utilisation of spread (a deferred amount relieved in a later period). For each spreading entry you must complete either Creation of spread or Utilisation of spread. The spreading rules are set out in HMRC's Pensions Tax Manual PTM043400.

Where the data comes from

  • The P&L charge and the amount paid are entered here — unlike the defined benefit template, the defined contribution template is not populated from an accounts note; you key the figures in (or roll them forward).
  • The charge is reconciled to the Profit and loss / OCI analysis, and the amount relieved flows to the adjustment of profit for the relevant business type.

What flows through to the rest of Corporation Tax?

The amount relieved — the paid contributions, adjusted for any spreading — feeds the adjustment to profit for the relevant business type.

What rolls forward next year?

The closing (asset) / liability and any unutilised spread roll forward, so the paid-basis position and the spreading of large contributions continue correctly into the next period.

Frequently asked questions

When is relief for pension contributions given?

In the period the contributions are paid, not necessarily the period they are charged in the accounts.

What is spreading and where do I record it?

Where contributions increase substantially year on year, the excess may have to be relieved over up to four years. Record the creation and utilisation of the spread in the pension spreading table beneath the main table (complete either creation or utilisation for each entry). See HMRC PTM043400.