Small Business Accounting

How do I make pension contributions through a Limited Company?

By

Chris Andreou

How do I make pension contributions through a Limited Company? guide

Contents

As a limited company director, you can make pension contributions as an individual (as an employee), as well as through your company (as an employer).

Most directors make pension contributions from their company. This is a tax efficient approach, as employer pension contributions are an allowable business expense, which means that your company doesn't need to pay corporation tax on pension contributions made.

You won't need to pay tax on your contributions, as long as it falls below your annual allowance (capped at £40,000 for 2022/23), and your pension benefits doesn't exceed the lifetime allowance (£1,073,100 for 2022/23).

<p>As a <a href="https://www.goforma.com/limited-company/what-is-a-limited-company" target="_blank">limited company</a> director, you can make pension contributions as an individual (as an employee), as well as through your company (as an employer).<br></p><p>Most directors make pension contributions from their company. This is a tax efficient approach, as employer pension contributions are an allowable business expense, which means that your company doesn't need to pay corporation tax on pension contributions made.<br></p><p>You won't need to pay tax on your contributions, as long as it falls below your <a href="https://www.gov.uk/tax-on-your-private-pension/annual-allowance" target="_blank">annual allowance</a> (capped at £40,000 for 2020/21), and your pension benefits doesn't exceed the <a href="https://www.gov.uk/tax-on-your-private-pension/lifetime-allowance" target="_blank">lifetime allowance</a> (£1,073,100 for 2020/21).</p>

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