Choices? Starting a company pension for my limited company or a stateholder myself?

russt93

Hi, myself and two others having been running a limited company now for nearly three years. I'm 28 (the others are 32 and 39) and I've been looking to start a stakeholder pension myself (probably a provider through Cavendish Online). My question is are there any tax benefits/risks to starting a company pension? Are the pension contributions from the company classed as expenses so lowering our corporation tax bill?

Does it work out more tax efficient for the company to pay money in or shall i just pay in myself into a stakeholder pension and get the boost due to the fact that money is paid in before income tax?

Question, questions, questions!
Any help and advice is MUCH appreciated!

dunstonh

My question is are there any tax benefits/risks to starting a company pension?

You are not starting a company pension. You are starting an individual stakeholder pension with employer contributions.

Are the pension contributions from the company classed as expenses so lowering our corporation tax bill?

Yes

Does it work out more tax efficient for the company to pay money in or shall i just pay in myself into a stakeholder pension and get the boost due to the fact that money is paid in before income tax?

Depends on your income and how its paid. That is one your accountant and IFA will have to calculate and discuss.

Its unusual to see a director use a stakeholder pension. I tend to find they don't want such a limited product. Plus, the contribution levels from directors tends to be more suitable for personal pensions.

Loughton_Monkey

Yes, you can start a pension yourself [even a stakeholder if that's really what you want????] but quite often it is slightly more beneficial for the company to fund this 'before' paying your salary. But you really need to get 'professionals' on the case, since we haven't a clue as to the size of your company or any metrics as to its size/profits etc.

It seems that three of you are involved. On the assumption that all three of you are broadly of the same mind, then you will probably find setting up the 'correct' arrangement under a 'group' pension most beneficial.