787J Allowance to employer

Summary

This section provides tax relief for an employer contribution to an employee’s PRSA.

Details

(1) “chargeable period” means an accounting period of a company or a year of assessment.

(2) Any sum paid by an employer as a contribution to a PRSA is allowable as an expense in computing the profits of the employer’s trade or profession or as an expense of management in the case of assurance companies (taxed on the I – E basis) and investment companies.

(2A) From 1 January 2025, an employer contribution to an employee’s PRSA will only be an allowable deduction in calculating the employer’s taxable profits up to the employer limit (as defined in section 787A).

(3) Relief is only available in respect of sums actually paid and not for provisions for or accruals in respect of such payments. Reliefs also only applies to that part of an employer’s contribution which relates to employees of a business the profits of which are charged to income tax or corporation tax.

Relevant Date: Finance Act 2024