Can my limited company pay into my pension?
Yes, a limited company can make employer contributions to a registered pension scheme. These may reduce its taxable profits where the business expense rules are met. They also count towards your pension allowance checks, so the amount and timing should be reviewed before payment.
These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.
Understand the company’s tax treatment
An employer pension contribution is different from paying yourself extra salary and making a personal contribution. The company pays the pension provider directly and records an employer pension cost. Corporation Tax relief normally depends on the payment being wholly and exclusively for the company’s trade. For a shareholder director, HMRC can consider the overall remuneration package and the work done for the business, rather than treating every contribution as automatically deductible. Relief is generally linked to when the contribution is actually paid, not simply when it is promised or accrued. Special spreading rules can affect unusually large contributions, so the payment date and amount both need checking.
Check allowances and cash before paying
Employer contributions count towards pension annual allowance calculations alongside relevant contributions from other sources. High income, previous access to pension savings and any available carry-forward can change the position. The earnings cap that limits relief on personal contributions does not apply in the same way to employer payments, but that does not remove the other limits or the company’s business expense test. Allow time for the provider to receive and allocate the payment before the intended year end. CASS can review the company’s tax and cash position with you, while a regulated adviser can help decide whether the pension arrangement and investment choices suit your personal circumstances.
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