Tax charges on pensions advice

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. 

Date published 29 Aug 2014

This article is intended to inform rather than advise and is based on legislation and practice at the time. 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 article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.