Directors and workplace pensions - the pros and cons

Directors and workplace pensions - the pros and...

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No this isn't a question about whether directors are subject to auto-enrolment - that's been well covered e.g. here.

What I haven't seen discussed is whether director-only companies might benefit from auto-enrolment. Assuming the director earns over £833 a month:

  1. The company must contribute to the pension
  2. This money is taken legitimately out of the company
  3. Thus reducing profits and therefore corporation tax
  4. The director also gets tax relief on the ee's contribution.

As a payroll person this seems like a win/win.

I'm interested in what accountants and tax advisers think of this. Any drawbacks?

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By petersaxton
07th May 2015 18:13


The money is handed over to the pension company and is never seen again.

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Replying to Tax Dragon:
Red Leader
By Red Leader
07th May 2015 18:22

what's the difference?

You've simply described a pension contribution, surely?

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