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>
Our small business accounting guide walks through absolutely everything you need to know if you're considering starting a limited company. From different taxes, limited company advantages/ disadvantages, how to pay yourself, and what your key filing requirements are.
- When to register a Ltd company
- When to register for VAT
- How to take money out of your company
- Dividend tax rates
- Limited company expenses & corporation tax
- Annual accounts and deadlines
Read more of our Small Business Accounting guides:
Free 20 minute accounting consultation about making pension contributions.
We help you understand how to actually pay yourself as a limited company director or sole trader. This guide helps explain the different tax rates, filing requirements and which company structure is best for you.
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