Pensions for Companies
Setting up a group pension scheme is attractive for a company from a tax relief, pension planning and building strong relationships with their employees perspective.
The employee benefits from looking forward to improved income in retirement; getting additional employee benefits and by contributing to the pension scheme s/he can qualify for tax relief and various tax benefits.
With these win/win positions for both employer and employee, it makes financial and business sense to think about setting up a pension scheme
Types of Schemes
There are two types of schemes; a defined contribution and defined benefit scheme. The defined contribution scheme is the scheme of choice for most employers as a defined benefit scheme is potentially a very high cost to the employer.
Key Performance Indicators for Schemes
While there are generous tax reliefs and benefits available to both employer and employee, the value of these tax benefits will be undermined unless the right Investment Strategy for the scheme is put in place at the beginning . It should be reviewed regularly, flexible and include a phased investment strategy for people who are close to normal retirement age.
The value of your investment may go down as well as up.
Past performance is not a guide to future performance.
Ambit provides expert and qualified advice on all of these critical factors.
Revenue Approved Taxation – Company & Employees.
Company Tax Position
“Contributions made by a Company on behalf of qualifying scheme members are all tax deductible as a business expense against trading profits, in the employer’s accounting period in which the contributions were made.”
We can advise you on new scheme set up or review your existing scheme. A review of investment performance and projections for income in retirement should always be part of annual reviews with recommendations for actions, if appropriate.
Employees Tax Benefits
Employees can normally make Additional Voluntary Contributions (AVC’s) to the group scheme to enhance their benefits in retirement and these qualify for personal tax relief and benefits.
Personal Tax Relief on own contributions.
Funds accumulate Tax Free in the pension fund.
Exempt from Capital Gains and Income Tax.
Employees do not pay Benefit In Kind. (BIK)
Tax Free Lump Sums available.