Chartered Accountants of Poynton, Cheshire

There have been considerable changes to the pension contribution rules over the last couple of years.

In summary, these are as follows:

• Any individual can make payments of £3600 per annum gross of tax, whether they have an income or not.

• If an employer makes a contribution on behalf of an employee, this will be tax deductible in that employer's accounts as long as the payment is made 'wholly and exclusively1 for the purposes of the trade.

• The maximum any individual can pay in any pension payment period (which is usually the same as the tax year) is normally £21,5000 and any contributions over this will be subject to income tax of 40%. There are some exceptions to this rule.

• There is no longer a provision which allows excessive personal pension contributions to be carried back to the prior year. Some special rules remain in place for retirement annuity contributions.

There are many ways to save tax - all of them perfectly legal.

For example, if you are over 65, keep your income below the £18,900 limit  - at that limit the higher allowances are scaled back.

Call us at Appletons Accountants and we'll tell you more!

There are many ways to save tax - all of them perfectly legal.

Did you know that....

Tax can be effectively deferred by investment in Enterprise Investment Scheme shares, Venture Capital Trust shares (both subject to limits), or in film finance partnerships?

Call us at Appletons Accountants and we'll tell you more!