Pensions
Cut company and personal taxes.
Tax planning avenues are increasingly being blocked by a government ever more desperate to maximise revenues. Against this backdrop traditional pension planning has recently been given a new lease of life as a means to reduce both personal and company taxation. By exploiting tax breaks today the net result can be financial security in the future for you and also for any staff that you employ, and the pension experts at Contractor Financials are on hand to help you exploit all of the new freedoms associated with Pensions Simplification.
Benefits for you instead of the taxman
Given the constant challenge of running a business, Contractors will dream of early retirement. Hard graft and grief should give way to the longest holiday of your life but instead of endless days on the golf course in a foreign land many people are forced to carry on working late into life, only to then retire in relative poverty.
The hard truth is that, without the benefit of a large company retirement package and with state provision woefully poor, you will be reliant on whatever nest egg you can build up for yourself.
The good news is that there are very compelling tax planning opportunities now associated with pension investment which could enable you to slash the proportion of your corporate and personal income that goes to HMRC.
Personal Contributions – Contractors can now personally invest (i.e. direct from your private bank account) up to 100% of salary into a pension and still benefit from income tax relief at your highest marginal rate (i.e. the government could be paying £4 for every £6 that you contribute).
Company Contributions – Business Owners may choose to draw a tax efficiently low salary (to reduce help reduce National Insurance) which will limit the scope for personal investment but this need not limit your ability to reduce company and personal tax bills by making a pension contribution. Thanks to ‘pensions simplification’ you now have massively increased scope to invest if we get the company to fund the scheme on our behalf. ’Employer’ contributions can be as much as £50k pa, representing a very tax efficient method of transferring money from company into personal hands. In good trading years a hefty corporation tax bill could potentially be reduced to nothing
