Company v's Personal contributions

[BlueSpud]

I run a small limited company, and am a director and a PAYE employee. I have a company pension, which was transferred from my previous employer. I am wondering if there is any difference in how my pension contributions are made, i.e. does it matter if they are seen as 100% company contributions or 100% contributions from my salary. From my personal point of view it does not matter as I give myself a gross package, to be split between salary & pension.

 

[JJ2000]

I think the principal advantage is if you want to contribute more than what the tax break allowances allow on a personal basis, then you can get the tax break on this, via reducing your corporate tax bill. So for example, if you are 30-39 you get a tax break of 20% of your salary, so say you earned EUR40,000 as salary you could 8,000 so as to fully avail of your tax break.

But if you wanted to contribute more than EUR8,000, [say 18,000] then if you contribute on a personal basis, you don't get the tax break on the excess [10,000]. So for this larger amount, you might make it [18,000] as a company contribution and you can write this off your corporate tax by reducing your profit for the year, so there's no limit on this (versus the limit on personal contribution).

As ever, you should double check this with your pension provider / accountant - anyone else know about/verify this?

 

[BlueSpud]

Thanks for the reply. This sounds like a company director could pay himself say 50% of his package as company pension, exceeding the normal lower limits. This sounds too easy.........
You might be right, go to a professional & see what they say.