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Posts tagged “Pensions”

The UK is one of the easiest places in the world to set-up a business and start hiring the talent you need. Whether you’ve been operating as a sole trader for a while and are now ready to expand or you’re starting from scratch, we’ve got the step-by-step guide you need to follow to take on your very first employee. 
From 6 April 2018 minimum pension auto-enrolment contributions will increase from 2% (1% employer, 1% employee), to 5% (2% employer, 3% employee). Make sure you are aware of the change and we recommend advising your employees. 
Pension auto-enrolment was introduced as part of the Pensions Act 2008, amid growing concerns that the population in general was neglecting opportunities to make payments towards state, private, and employer pensions. 
 
In October 2012, auto-enrolment into a workplace pension scheme became mandatory for large companies in the UK. All employees in the UK between the ages of 22 and state pension age will be eligible for the scheme, so long as they earn above the £10,000 income threshold. By 2018, companies of all sizes (as small as 1 director and 1 employee) will be included in the scope of the legislation. So what does this mean for limited companies? 
Investing in a pension personally allows you to benefit from tax relief at your highest marginal rate but you must draw the contribution as salary and dividends. However you can also invest directly via your company which not only saves the hassle of drawing out the funds but also reduces your corporation tax bill without any benefit in kind considerations. 
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