Every employer should sensibly check the pension contributions made to employee plans are cleared by the local HMRC office until clearer guidance on rules is delivered, claims Winterthur Life's pension strategy director.
Mike Morrison says the new rules, which allow tax relief on employer contributions only if they are ‘wholly and exclusively’ for the purposes of business, are vague and confusing to many IFAs and providers. Examples of parts of the guidance published by Her Majesty's Revenue and Customs (HMRC) which are causing confusion include the need to know what “the taxpayer’s subjective intentions at the time of payment” are, and whether a benefit arising from a contribution is planned or merely a “consequential and incidental effect of the payment”. This essentially means every employer's pension...
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