Employer pension contributions
Andy_Schleider
Member
I feel really stupid for asking this, especially as I've been giving advice about the PTPA exam, but here goes...
An individual who owns his own limited company earns £36,000, which is made up of salary and dividends, wants to start employer pension contributions, split between monthly and then a top up at the company year end.
The employer contribution will be more than his net relevant UK earnings as dividends are not counted, but does this matter with employer contributions? I've been trying to find out on the internet and also reading through old study texts (glad I didn't throw them out!!) but the only examples that are given are those who earn way more than £40k or the e'er contributions are less than 10%, which is no use to me at all.
Comments
There is no salary link for employer contributions.
The test for tax relief (corporation tax) comes down to the wholly and exclusively for the purpose of trade test.
AA / TAA will still apply though.
What he said! Just made a £160k payment for someone who earns an awful lot less. Employer Cont under Wholly and Exclusively.
Would the individual have to pay any AA charge if the AA is breached? Or is the employer responsible in any way for paying that AA charge? I'm fairly confident it would be the former but reading this thread has got me thinking!
All on the individual, though they can opt for the scheme pays method if they qualify.
Ok thank you for confirming Jamie!