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Tax charges on pensions advice

My business has reached its staging date so we have set up a workplace pension scheme for our employees. As part of that, we are offering pensions advice provided by a third party to our employees. Are there any tax implications of this? 

Pensions information and advice provided by an employer to their workforce as a whole (e.g. a presentation to which all employees are invited to attend) is unlikely to give rise to any tax charges.

However, where an employer pays for one-to-one sessions to provide advice to employees, as a general principle a tax charge will arise on the cost of the advice as this represents an employment-related benefit.

But since 2004, employees could escape a tax charge provided that:

  • similar advice is offered to all employees, and
  • the nature of the advice does not extend beyond pensions into general financial, and particularly tax, advice and
  • the cost is no more than £150 per employee per year.

If the cost of the advice exceeds £150 per person the whole amount is taxable, not just the excess over £150.

If you’d like to discuss the tax implications of workplace pensions, please feel free to contact your local TaxAssist Accountant. 

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