Pension contributions are one of the few remaining tax breaks available to limited companies. It makes sense to take advantage of this tax break for you, as a company director, and your employees if you have any. 

Pension contributions through your limited company

Paying pension contributions is tax-efficient because you can reduce your company's taxable profits and therefore your Corporation Tax liability.

Based on the amount your company earns as profit, you will pay the current rate of Corporation Tax, reducing the amount you can take from your company as a dividend. 

You can pay as much into your employee's pension scheme as you like, subject to HMRC's contribution limits and rules. Your contributions will be tax-free as long as they do not exceed the individual's pension Annual Allowance, therefore reducing your company’s taxable profits and saving you on the Corporation Tax liability on that contribution.

Carry forward of unused allowances

If you have not used your full  Annual Allowance from previous years, you might be able to carry it forward and use it in the current tax year. 

Carry forward can work for you if you have contributed less than the Annual Allowance in the previous three tax years and were a member of a UK registered pension scheme during that time. 

The value of an investment with St. James's Place will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax reliefs depends on individual circumstances.