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