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? 

1st September 2014

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. 

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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