Maximum pension tax relief on £12,000 salary?

What is the maximum pension contribution a director on £12,000 salary can pay and get tax relief?

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The director receives £12,000pa salary (plus dividends). There is no company pension scheme so the director wants to pay into his personal pension scheme. Am I correct in thinking that he will only get tax relief on a maximum £9600 contribution - ie £2400 tax relief grossed up by the pension company?

If the company paid into his personal pension I assume that the pension company would NOT add 25% but the company could claim the contribution as a tax deductible expense? Or can it only claim the contribution as a tax deductible expense if it is into the company's own employer scheme?


Thanks in advance.


Replies (4)

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By David Ex
09th Mar 2023 16:34

I’ll go yes, yes, no.

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Replying to David Ex:
By AndyC555
10th Mar 2023 08:21

It was, I think, Roy Hattersley who once replied to a series of questions in the Commons with:

The answers to those questions are yes, yes, and no. But not necessarily in that order.

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By Matrix
09th Mar 2023 16:44

The company can contribute into his personal pension, he just needs to let the scheme know it is an employer contribution. It is not capped by NRE, just the usual annual allowance, W+E etc which come up here quite often.

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By frankfx
09th Mar 2023 17:36

When did he set up his personal pension plan?

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