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Company pension contributions - not an employee

Can Company make pension contribution for a Director/Shareholder who is not on Company PAYE

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Can a Company make a pension contribution for a Director/Shareholder who is not actually paid a salary on the Company's PAYE scheme.

The Director has another job elsewhere on PAYE and so just draws dividends from the company; but as the company has profits she wants to take some remuneration from the company but as a company pension contribution rather than as a salary.


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12th Feb 2019 15:14

You say she 'has another job elsewhere'. If this is a full time job it may be difficult to prove that any company pension is part of an overall remuneration package which reasonably reflects her contribution to the company's trading activities.

Other than that, in principle there's no reason why someone can't receive all of their remuneration entitlement as pension contributions if that's what they want.

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12th Feb 2019 15:25

is she in a pension scheme in her other job, and is there any danger that additional contributions would take her above the annual allowance?

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By MDK45
12th Feb 2019 17:45

Surely you're only going to get tax relief at 19% i.e. corp tax saving because the pension fund won't be claiming any relief on E'er's conts.

I don't see the point unless the director has used up all the annual allowance elsewhere (and b/fwd spare) because if not then the relief will be at least 20% in PAYE i.e. marginal tax rate. What am I missing? Is this director the sole shareholder?

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