New PAYE worker & AVCs

[paulbh]

New PAYE worker & AVCs

During the year 2003 I was a self-employed contractor, however now I'm a PAYE worker and member of the company pension scheme.

I recently filled in my tax return for 2003 on the assumption that I would be able to pay an AVC (or special employee contribution) for the money earned while contracting to the company pension scheme and therefore reduce my tax bill for 2003. However now the company managing the scheme is telling me that I can only contribute money earned from my current employment, and that this is a Revenue rule.

This just leaves me with the option of opening a seperate PRSA or Personal pension to invest the money.

This doesn't right to me however. Firstly in all the publications and web-sites I have investigated I have found no such rule. Secondly I don't understand why the Revenue would care which pension scheme I put the money into.

Has anyone out there had any experience with this situation? I don't want to split my pension over multiple schemes. Is this my only option?

 

[Alan Moore]

There is a rule which.....

.... more or less says that an injections into a company pension plan must be tested. The test ensures that if you were to leave tomorrow that the benefits you would be entitled to would not exceed set revenue limits. These are calculated based on SERVICE COMPLETED and salary. If you put in a cash injection and your period of service is very short ( months from the sounds of it ) this might apply.