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Timing is everything when it comes to pension contributions for companies

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Thursday March 17, 2011 at 10:00am
There’s nothing worse than having to wait to feel any tax saving benefits. Few business owners perhaps realise that the timing of their company’s year-end and its pension contributions can affect when the benefit of any tax saving is felt.

Pension contributions and company year-end statistics from Companies House show that the most popular company year-end is 31st March. And with that date fast approaching now is the time companies should be considering company pension contributions, if they want to benefit from tax savings next year rather than having to wait until 2013.

Company pension contributions have to be made by the year-end to reduce the profits for that year. Postponing a pension contribution by just a few days could delay the reduction in a company’s tax bill by up to 12 months.

So, if you’re the MD or Finance Director of a company that normally makes company pension contributions get in there quickly, before your year end. Of course you should always take advice before making pension contributions, especially now because the personal annual allowance on pension contributions is being reduced by 80% from 5th April. The rules are complex and believe it or not for many this deadline will already have passed due to the pension input period rules.

Andy Parker
Chartered Accountant and Chartered Financial Planner

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Parker Chartered Accountants and Financial Advisors is the trading name for Parker Business Development Ltd (Registered No. 4116664), Parker Tax and Trust Ltd (Registered No. 06950353) and Parker Financial Planning LLP (Registered No. OC347027). Parker Financial Planning LLP is authorised and regulated by the Financial Conduct Authority. All companies are registered in England and Wales – registered office contact details here