Another brick in the wall!

THOSE OF YOU who read 'Hitting the wall' (see Taxation 9 February 2006 page 465) will be aware of the Government's new stance on the deductibility of company contributions to pension arrangements for directors particularly shareholding directors of private limited trading companies.

The new situation following the implementation of pensions simplification on 6 April 2006 ('A-Day') is that instead of the automatic deductibility that was available for corporation tax purposes for such contributions (provided broadly that the statutory limits on the benefits emanating from such contributions were not exceeded) the pension contributions to be deductible must be expended by the company 'wholly and exclusively' for the benefit of the company's trade under the provisions of TA 1988 s 74(1)(a).

We have been desperate for clear transparent guidance as to how local HMRC officers are going to...