An employer contribution to its pension scheme to provide retirement benefits for a member is:

• A. A benefit in kind for income tax purposes for the member
• B. Subject to deduction of PAYE at source
• C. A benefit in kind for income tax purposes for the member, which he or she can then claim tax relief on as if they had paid it themselves
• D. Not a benefit in kind for income tax purposes for the member

Answer: (D)

Employer contributions to a pension scheme are not treated as a benefit in kind. They are funds paid by the employer into the member’s pension to provide retirement benefits, not a cash perk or extra pay the employee can use now. Because of this, they don’t count as income and aren’t subject to PAYE at the time of contribution. Tax relief for the member typically applies to their own contributions, not to the employer’s contributions. So, this kind of contribution is not a benefit in kind for income tax purposes.