Cross-Border Pension Contributions
The European Commission has sent a formal request to the UK to amend its legislation which denies employees the right to deduct pension contributions paid to pension funds located in the EU.
This request concerns the fact that these contributions are denied deductibility by HMRC in the absence of certain information being provided by the pension fund to HMRC. In many cases, this is because of the level of information requested by HRMC and the fact that the pension is not specifically aimed at UK employees.
The European Commission is of the opinion that overseas contributions should be treated in the same way as contributions to UK based pension funds.
The Commission has given the UK two months to respond, if no response is received this matter may be referred to the European Court of Justice (ECJ).
This issue currently affects a significant number of cross-border workers based in the UK who make contributions to a pension scheme in another EU country.