As expert accountants, we understand the importance of pension contributions and the tax benefits that come with them. We can help you understand the tax relief you're entitled to based on your employment status, whether you're self-employed, the owner of a Limited company, or employed.
If you're self-employed, you can still receive tax relief on your pension contributions according to your income tax rate. Your pension provider will automatically claim tax relief at the source. Still, it's important to note that you must reclaim any additional relief via your tax return if you're a higher-rate taxpayer. Your annual allowance for contributions is usually capped at £40,000 or 100% of your annual earnings up to £40,000.
For Limited companies, making pension contributions as an employer is more beneficial. You can contribute pre-taxed company income to your pensions, and the "employer contribution" counts as an allowable business expense, meaning your company will receive tax benefits via your corporation tax at 19%. However, keeping track of your contributions is vital to staying within the Government's set allowance and facing tax charges.
While we can't advise you on investments and pensions, we can refer you to independent financial advisors who can help. Our recommendations are ethical, and we don't benefit in any way.
If you'd like to understand more about your situation and the tax relief you're entitled to, please contact one of our tax experts today. We can assess your situation and provide the best advice to help you achieve your financial goals.
