payments to Company pension scheme

payments to Company pension scheme

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I have been told that the allowable deduction for employers contribution to Company pension scheme is limited to 2 times gross directors remuneration is this correct? Has anyone got a definitive answer to what is now recognised as an acceptable deduction?
confused

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Euan's picture
By Euan MacLennan
14th Aug 2007 13:48

Not quite
The Revenue guidance is not to attack unless the overall remuneration package is excessive for the value of the work done by the director. The overall package could well comprise a minimal salary and a massive pension contribution.

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By User deleted
14th Aug 2007 12:32

Pension contribution
Thanks for that.The person who told me 2x salary was a wizz kid from insurance company!! the link to BIM 47105 seems to make it much clearer it would appear that the rev would only attack contribs where directors are receiving low salaries !

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Euan's picture
By Euan MacLennan
14th Aug 2007 10:50

Why not ask the person who told you?
There is no 2x salary limit - pension contributions are no longer linked to earnings.

If you do not believe me, have a look at the Revenue manual BIM46035. The test is whether the pension contribution is made wholly and exclusively for the purposes of the trade. The guidance is fairly relaxed - for example, pointing out that the removal of the earnings link has facilitated larger contributions than in the past.

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