Finance Bill opens 'tax loophole' for firms - A J Bell

The actuary group says latest pensions proposals will allow company contributions up to £215,000 per annum for each employee, irrespective of the individual’s length of service or taxable earnings, when the new rules comes into effect in April 2006. While this will enable directors of private companies to reduce company profits by paying large pension contributions each year, effectively, it will also help them to reduce the amount of corporate tax they pay, A J Bell says. Moreover, they could do this while at the same time continuing to draw income by way of dividends rather than sal...