Dry January may be behind us, but as gloomy February rolls in, there’s a glimmer of optimism on the horizon—spring is approaching, and with it comes the end of the tax year for individuals and businesses with a 31st March year-end. This is the perfect time to reassess financial strategies, particularly, pension contributions.
Why Now is the Time to Act
For individuals, making pension contributions before the tax year closes can optimise tax relief. The current annual allowance for contributions eligible for tax relief is up to £60,000 or the value of your earnings—whichever is lower. However, for high earners and those who have already accessed their pension, there are additional rules to consider. Seeking expert financial advice can help navigate these complexities.
If you haven’t accessed your full pension allowance in previous years, you may be able to take advantage of the ‘carry forward’ rule. This allows you to utilise up to three years of unused pension allowance while still benefiting from tax relief. Depending on your circumstances, this could mean up to a further £140,000 in available contributions.
SMEs with 31st March year-end
For SMEs, pension contributions can offer valuable corporation tax relief. Contributions made to controlling directors’ pensions before the year-end should qualify, making this a key area for businesses to explore with their accountants.
Planning Ahead for the Next Tax Year
With just a couple of months until the tax year ends, now is the ideal time to evaluate your pension contributions, but please, do take professional advice.
For further information call 0333 320 9230 or visit wbrgroup.co.uk
