Limited company and pension

[mskemails]

Hi

I have recently setup a limited company and want to pay for pension, can you clarify my queries below?

1. Can my company pay the contributions from companys account without my personal contributions?
2. If I too want to pay my contributions, can I get any tax benefit?
3. If I pay from my company bank account to my pension scheme (ie. To Directors pension scheme without direcotrs contributions), Am I eligible to access the fund fully at later stage.

Regards
MSK

[Jeremiah@RHJAccountants]

It is tax efficient to make an employer pension contribution into your personal pension plan from the company as this will reduce your corporation tax liability.

The maximum amount you can contribute to a personal pension plan or stakeholder pension scheme, and on which you can receive tax relief, is 100% of your earnings (Salary) or £3,600, whichever is greater. This is capped at the annual allowance.

The Annual Allowance for the tax year 2011/12 is 50,000, inclusive of your own contribution and any other amounts paid into an approved pension scheme.

Also as of the 6 April 2011 you can bring forward any unused tax relief, up to an overall maximum of 50,000 from three earlier tax years.


You would need to pay the pension direct from you company bank account to the pension provider.

[MrRobin]

The maximum amount you can contribute to a personal pension plan or stakeholder pension scheme, and on which you can receive tax relief, is 100% of your earnings (Salary) or £3,600, whichever is greater.

Hmm... my understanding was that this only applies to making contributions yourself, i.e. from your own personal funds, on which tax relief is applied and the contribution incireased accordingly. I didn't think there was a limit on the amount a company can pay into someone's personal pension.

[Clare@InTouch]

Just to add, you have the option of either paying personally or through the company bank account. Through the company you'll get CT relief at 20%. If you pay it personally your basic rate tax band is extended, so you also get 20% tax relief. The latter is only useful if you're a higher rate taxpayer though, otherwise stick to paying through the company.

You can pay in excess of your salary as it's company contribution not a personal one, but discuss with an IFA before doing so.

[MrRobin]

You can pay in excess of your salary as it's company contribution not a personal one, but discuss with an IFA before doing so.

Thank you.

[Jeremiah@RHJAccountants]

Yes what Claire said

Just been reading the breaking news on CUK!

[mskemails]

Thanks your information.

so just to confirm my company can pay for me WITH OUT my contirbution....Isn't it ??

MSK

[MrRobin]

Isn't it ??

Innit!

[minstrel]

Thanks your information.

so just to confirm my company can pay for me WITH OUT my contirbution....Isn't it ??

MSK

Yes - company can make contributions to your pension without you having to make any contributions personally.