I've received the a copy of accounts and comps from the previous accountant and noticed £5,000 of pension contributions. I asked the client to confirm if this was set up as a company scheme and have now been told by the accountants (who are also registered financial advisors) that it's a personal scheme. They said it was standard practice for all their clients to claim corporation tax relief on company contributions into the personal scheme. Apparently, they didn't set it up as a company scheme to avoid the costs/admin of having to do so.
Is this treatment correct - as I've only ever seen tax relief claimed where the scheme is in the company's name.
Replies (4)
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Salary costs
I can't see how this is a corporation tax issue. It's part of the employee's remuneration package and should be deductible - it's akin to salary. Assuming it is correctly treated for income tax purposes, the it seems ok to me.
Double tax relief
You need to concentrate on whether these contributions have been treated as net and grossed up by HMRC already. In which case i doubt they would look favourably on claiming CT relief on top!