HMRC proposals could hurt pension funds
Small companies could lose tax breaks on contributions
The pension funds of small companies could be hit hard by proposals to remove
current tax breaks.
Draft guidance by HM Revenue & Customs means that, from April,
contributions made to pensions only for business purposes will avoid paying
national insurance and be able to claim corporate tax relief.
This will affect small companies where contributions are made by companies in
which the director is the majority shareholder.
The Federation of Small Businesses argued that the new rules could encourage
directors to pay themselves a salary instead of saving for the future, according
to The Times.