Pension contribution limits

Started the weekend by reading an article about allowable contributions to pensions. Pension contributions are now subject to new limits of £40,000 a year (down from £50,000) and a further limit that employee's (not employer's) contributions must be less than salary.

Below is a link to the article that I read, however it only works for me because of copyright restrictions on the article. If you really want to read the article you will have to subscribe to www.tipsandadvice–tax.co.uk.

My restricted link

Pensions automatic enrolment - official information sources

This link is to the (UK) Pensions Regulator with a host of resources about automatic enrolment.  Auto enrolment has started and is being rolled out starting with big companies first.

Pension law changes

This link goes to a fairly brief summary of the changes and employers' obligations but don't panic as this is the timetable (so far):

Staging date timeline

Use the table below to get an idea of when the new law will apply to you. The date your duties will start is known as your 'staging date'. The dates below are indicative. Actual staging dates will be based on the number of people in an employer's PAYE scheme on 1 April 2012.

You'll need to have details of your PAYE scheme to hand, including the reference number(s) and the size of your PAYE scheme. If you have more than one PAYE scheme, your duties will all start together from the staging date that comes first.

Employer (by PAYE scheme size or other description)	Staging date
120,000 or more	1 October 2012
50,000-119,999	1 November 2012
30,000-49,999	1 January 2013
20,000-29,999	1 February 2013
10,000-19,999	1 March 2013
6,000-9,999	1 April 2013
4,100-5,999	1 May 2013
4,000-4,099	1 June 2013
3,000-3,999	1 July 2013
2,000-2,999	1 August 2013
1,250-1,999	1 September 2013
800-1,249	1 October 2013
500-799	1 November 2013
350-499	1 January 2014
250-349	1 February 2014
Less than 50 with the last 2 characters in their PAYE reference numbers 92, A1-A9, AA-AZ, B1-B9, BA-BY, M1-M9, MA-MZ, Z1-Z9 or ZA-ZZ	1 March 2014
240-249	1 April 2014
150-239	1 May 2014
90-149	1 June 2014
50-89	1 July 2014
Less than 50 with the last 2 characters in their PAYE reference numbers BZ	1 August 2014
Less than 50 with the last 2 characters in their PAYE reference numbers 00-01	1 September 2014
Less than 50 with the last 2 characters in their PAYE reference numbers 02-04	1 October 2014
Less than 50 with the last 2 characters in their PAYE reference numbers 05-07, 0A-0Z, C1-C9, CA-CZ, D1-D9 or DA-DZ	1 November 2014
Less than 50 with the last 2 characters in their PAYE reference numbers 08-11, 1A-1Z, E1-E9 or EA-EZ	1 January 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 12-15, 2A-2Z, F1-F9, FA-FZ, G1-G9 or GA-GZ	1 February 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 16-20, 3A-3Z, H1-H9 or HA-HZ	1 March 2015
Less than 50 with the last 2 characters in their PAYE reference numbers I1-I9, IA-IZ	1 April 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 21-25, 4A-4Z, J1-J9 or JA-JZ	1 May 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 26-31, 5A-5Z, K1-K9 or KA-KZ	1 June 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 32-38, 6A-6Z, L1-L9 or LA-LZ	1 July 2015
Less than 50 with the last 2 characters in their PAYE reference numbers N1-N9 or NA-NZ	1 August 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 39-47, 7A-7Z, O1-O9, OA-OZ, P1-P9 or PA-PZ	1 September 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 48-57, 8A-8Z, Q1-Q9, QA-QZ, R1-R9, RA-RZ, S1-S9, SA-SZ, T1-T9 or TA-TZ	1 October 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 58-69, 9A-9Z, U1-U9, UA-UZ, V1-V9, VA-VZ, W1-W9, WA-WZ	1 November 2015
Less than 50 with the last 2 characters in their PAYE reference numbers 70-83, X1-X9, XA-XZ, Y1-Y9 or YA-YZ	1 January 2016
Less than 50 with the last 2 characters in their PAYE reference numbers 84-91 or 93-99	1 February 2016

Tax and Pension update

Attended a presentation hosted by Morgan McKinley and Spofforths.

Tax update in the light of last week's budget
Key points new to me:

1. Although the 'big company' tax rate will drop from 28% to 26% in Apr 11 and then gradually down to 23% by Apr 2014, the small company rate will reduce to 20% and stay there.
2. Written down allowances (WDAs) will be 20% for 11/12 (special rate pool 10%) but will fall to 18% from 2012/12 (special rate pool 8%).
3. Research and Development (R&D) threshold reduced to £10k (need to see more about definitions).

Pensions changes

presented by Philip Wise

1. Govt to introduce 'auto-enrolment' pensions.  This means that employers will be required to set up pension schemes and enrol all employees into them. The employer must make a contribution and the employee must make a contribution. There is a default scheme called NEST, or the employer may pick a private scheme.
2. The scheme is to start in July 2012 for voluntary adopters. As the current timing stands, large companies or those employing over 800 people are due to start October 2012 to October 2013. Companies employing fewer than 50 people will be staggered over the period July 2014 to February 2016. It was though considered likely that the dates may slip.
3. The contributions will be phased in also. Up until October 2016 employee contribution will be 1% and the employer contribution will be 1%. Between October 2016 and October 2017 the contributions will be 3% for employees and 2% for employers. After 2017 it will be 5% of employees and 3% for employers. The scheme will apply to all jobholder under the pension age, aged over 22, who earn more than £7,475 and this includes part-timers.
4. The employers is required to enrol all employees and re-enrol them every three years. Employees may opt out, in which case they would not have to pay their contribution and the employer would not have to pay his contribution.
5. The employer is specifically banned from discouraging membership of the scheme - for example offering extra salary for employees to opt out. The employer is also specifically banned from giving advice, for example, concerning whether to opt out.

1.5 hours CPD