Paying pension contribution from Limited Company

Didn't find your answer?

Hello,

I have had cause to set up a limted company. I am the sole Director. I had been making payments into my personal pension from my current account ( and receiving tax relief ) and now wonder if I will benefit from the same tax relief or similar relief if I make the payment into the pension fund sourced from the limited company bank account. Is this plan acceptable or must the payments to my personal pension always be made by me rather than another legal entity ?

Thank you.

Replies (3)

Please login or register to join the discussion.

RLI
By lionofludesch
08th Feb 2019 13:50

The contract would need to be between the company and PensionCo. Paying your existing contract payments wouldn't work.

The payments would need to be paid gross. There'd be no basic rate relief at source. The company will get its tax relief by deducting the cost from its profits.

I suggest you talk this through with your accountant as there may be other factors affecting the decision.

Thanks (1)
Psycho
By Wilson Philips
08th Feb 2019 14:28

There's nothing to stop the company paying your personal contributions on your behalf, from its bank account, by way of deduction from net salary. Or you could use a net pay arrangement - tax relief is the same but the mechanics are different.

But as those above have indicated this may not be the most tax-efficient arrangement.

Thanks (1)
avatar
By zebaa
08th Feb 2019 14:31

Or salary sacrifice. Lots of choice. You need to either do lots of reading or talk to someone who knows this stuff.

Thanks (1)