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Company Pension Contributions to a Personal Pension Scheme

Company Pension Contributions to a Personal...

A couple of questions in connection with the above: 


Firstly, will an employer obtain tax relief on company pension contributions to an employees personal pension scheme, and secondly will the contributions received in personal pension scheme be grossed up.

Many thanks.

Joe Reid

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19th Feb 2016 09:55

yes and no

An employer can obtain tax relief but the contribution must be made gross.

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By nrw
19th Feb 2016 10:41

Employer contributions - via salary sacrifice or otherwise - are generally the most efficient form of pension contribution, as they are deductible against corporation tax and avoid personal income tax, employee NI contributions and employer NI contributions.

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22nd Feb 2016 10:56

Pension out of reserves

Can a company pay into the employees pensions using money from its reserves as there is not enough net profit in the year available?

ie. Wants to pay £40k to the employee pension, Net profit only £20k for the year and so therefore there'd be a loss for the year but the balance sheet as a reserve of £90k (in the bank).  

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By TaxSpud
22nd Feb 2016 11:26

You have to be careful the employees scheme is correctly set up to receive employer contributions and the payments from the compnay are correctly treated by the pension company as employer contributions. If the company pays employee contributions you have a BIK issue

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