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Company Payments to a Private Pension for Director

Private Pension Payments treatment in a Co

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I wonder if anyone could advise the treatment of private pension payments made at £200 per month paid from a company account.  

Do I treat as an expense and save Corporation Tax, then declare additional income on the Self Assessment for the Director, including the pension payments made.

Or Do I treat the payments as a Directors Loan with it being a private pension rather than a company pension scheme.

Many thanks in advice.

Replies (13)

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By Chipette
23rd Apr 2018 13:51

It will depend on how the pension provider has treated these payments (gross or with relief at source?).

Thanks (1)
RLI
By lionofludesch
23rd Apr 2018 14:02

Or, put another way, is the contract between the company and the pension company or between the director and the pension company ?

Thanks (1)
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By Tax Conundrum
23rd Apr 2018 14:04

If treated as gross payments then surely you don't need to treat as Directors Loan - it just forms part of the Directors remuneration? I don't believe it matters that it isn't a company scheme?

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By andy.partridge
23rd Apr 2018 14:40

Were they 'tagged' as employer contributions by the pension provider. There will be a statement as proof if the client 'thinks' they were. This is critical to your subsequent treatment. Find out and report back.

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By Carolynne
23rd Apr 2018 16:15

I have spoken with the financial advisor who sold the pension to the client, and he says the pension is being paid gross as employer contributions.

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Replying to Carolynne:
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By andy.partridge
23rd Apr 2018 16:25

Then he will very easily be able to email across a statement which supports that, which will give you confidence to treat the payments as a tax-deductible company expense.

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Replying to andy.partridge:
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By Carolynne
23rd Apr 2018 16:38

Yes, I have asked for this to be emailed for my file.

Given that it is a gross contribution. Do I need to include other income on the directors tax return with the pension contributions made?

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Replying to Carolynne:
RLI
By lionofludesch
23rd Apr 2018 16:41

Carolynne wrote:

Yes, I have asked for this to be emailed for my file.

Given that it is a gross contribution. Do I need to include other income on the directors tax return with the pension contributions made?

No.

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Replying to Carolynne:
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By andy.partridge
23rd Apr 2018 17:07

No, it's a tax free part of the director's remuneration and is not disclosed on their tax return. If the amount in the tax year was more than £40k report back again!

Ah, I see it's currently £200/month.

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Replying to Carolynne:
RLI
By lionofludesch
23rd Apr 2018 16:28

If that's so, it's a deduction from Corporation Tax profits.

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By Carolynne
23rd Apr 2018 17:15

Many thanks to everyone for their help today. I will await what the financial advisor sends to me. If he has not been truthful and it is not set up for the employer to pay gross, then I will treat it as a payment to Directors Loan account.

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Replying to Carolynne:
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By Manchester_man
24th Apr 2018 04:30

Blimey, has this guy previously been found to tell lies to clients about their pension contributions?

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Replying to Manchester_man:
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By andy.partridge
24th Apr 2018 09:41

He's an IFA. 'Nuff said.

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