Originally Posted by
Al R
EDP:
HMRC's attitude towards it is equally variable. I spend about 2 hours a week chatting with the dept in Liverpool which has the say. Part 2 Chapter 5 of the Finance Act 2005 differentiates between redundancy payments and contractual payments - HMRC accepts that it isn't a pension payment (which it isn't of course) but is happy to pass the decision to the various pension companies. Who can go around like headless chickens - the banks look on it as one, for instance.
This is important because if it counts as 'relevant earnings', it can count towards receiving tax relief for a pension contribution - important if a Higher Rate tax payer has limited need for capital and liquidity with his/her EDP and wants a last hurrah force multiplying bang per buck as a wage earner. It isn't for everyone, take advice etc, but for someone with a career profile cruising horizontally the annual pension contributions are notionally modest, so, making use of the previous 3 years unused annual contributions, an uplift can run into the £ tens of thousands.
Al R, with only a few days left of this tax year, I wondered whether it was any clearer whether EDP counts as relevant earnings from the perspective of making a pension contribution?