pension paid by company?

pension paid by company?

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I am a director of a company. Making yearly profit of around 85,000. My accountant said that i should contribute to pension through company since it will save company tax. Is it true and how?

Please explain. Thanks

Replies (8)

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By duncanedwards
30th Jul 2014 20:03

You mean ...
he/she didn't tell you? You should ask him/her.

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By johngroganjga
30th Jul 2014 21:44

.

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By johngroganjga
30th Jul 2014 21:40

Agree with the above. Furthermore if you don't trust your accountant's advice without getting second opinions on everything they say, you probably need a new accountant - one in whom you can have confidence.

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By pauld
31st Jul 2014 13:18

yes its true

The contribution is an expense of the company thereby reducing the taxable profit

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By Portia Nina Levin
02nd May 2015 12:39

(No subject)

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By moneymanager
31st Jul 2014 16:24

Simplistically, yes

Yes, company pension contributions can save corporation tax but that doesn't mean the company should make them or that it will, in overall terms, be advantageous for you.

The decision must be made taking account of a host of factors including your current and likely future tax/remuneration level and structure (NISAs from net pay alternative?), your relationship to the company (i.e. shareholding), and need of the company for future funding (I have seen a recommendation made to make large pension contributions to a profitable company which had the fortunate position of sales going through the roof but the unfortunate position of negative cash flow i.e. their big cash pile was going to be gone in around 8 months and they would wouldn't have been able to pay the wages!)

 

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By jon dickinson
31st Jul 2014 17:12

pension paid by Company

Set up a Small Self Administered Scheme-(SSAS). This will not only save tax but offer a range of flexible planning opportunities going forward such as providing cash flow through loans and funding for commercial property purchase. You will not regret it!

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By GuestXXX
17th Mar 2015 17:13

.

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