Corporation Tax Act 2009 section 1294

Provision or payment out of employee benefit contributions

Section 1294 sets out the rules for determining when qualifying benefits or qualifying expenses paid by a scheme manager are treated as having been funded out of the employer's employee benefit contributions.

• When a scheme manager provides qualifying benefits or pays qualifying expenses after receiving employee benefit contributions, those benefits or expenses are automatically treated as coming from those contributions
• This treatment is capped at the total contributions received, reduced by any benefits or expenses already treated as provided or paid out of earlier contributions
• A separate but similar rule applies where qualifying benefits are provided in connection with the termination of employment, again capped by the remaining balance of contributions not already allocated
• No other amounts received or paid by the scheme manager are taken into account when applying these allocation rules