complete financial know how

My mate says my Limited company can pay into my pension…

Your friend is correct, your Limited company can pay into your pension scheme as an employer contribution. Awesome old lady

How much should I pay?

Unlike personal pension contributions, employer pension contributions are unrestricted, however there are limitations for the tax relief.

Corporation Tax relief:

The contributions from your Limited company can be a tax-deductible expense so you could save Corporation Tax (currently at 19%).

To apply, the employer contributions must satisfy the “wholly and exclusively” conditions for tax relief.

Annual Allowance:

Each tax year, you have an annual limit on how much can be put into your pension schemes. This allowance is for both you and your employer’s contributions.

Currently the annual allowance is £40,000, however depending on your income could be restricted to £10,000.

Lifetime allowance:

You will also need to ensure that your pension pots are not worth more than the lifetime allowance, as the tax rate for exceeding the lifetime allowance can be as high as 55%.

If you would like to find out more on this matter, then give us a call on: 01908 219100 or email us at: enquiries@advaloremgroup.uk

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