The principle of British companies providing their employees and workers with pension contributions is well established in the UK.
However, many advisers are not aware that the position of employees and company directors from a pension perspective, while sharing some common issues, is not necessarily identical. For example, whilst a company can choose to make pension contributions for a director, it is not obliged to.
Accountants will be aware of the general income tax restrictions that apply to pension contributions. While the precise rules differ depending upon whether someone is in a defined contribution (money purchase) scheme or a defined benefit (final salary or average salary) arrangement.
Key restrictions include:
- a maximum annual allowance of
