Pension contributions rules on backdating
You can pay in a maximum of £2,880 which then gets topped up to £3,600.You can also set up a scheme for a non-taxpayer and pay into it on their behalf (this might be a spouse or civil partner or a child or grandchild) and get tax relief at this rate.The situation is different for personal pensions as your contributions will be paid from your own taxed income.As a result your pension provider will claim 20% tax relief back from the taxman on your behalf.If you are a member of a workplace scheme your employer will deduct your pension contributions from your salary before tax has been paid, meaning you only pay tax on the remainder.This means you get the full benefit of tax relief at whatever rate of income tax you pay and need to take no further action.Company contributions into a pension will be a tax deductible business expense and so reduce the amount of corporation tax your company pays.
If the total value of your pensions exceeds this limit a tax charge will apply.
To be eligible for carry forward, you must have been a member of a pension scheme during the carry forward years, although you do not actually need to have been making contributions.
Before making any investment I would suggest that you get specific advice and this is especially important for higher earners (over £110,000) as they may have a reduced annual allowance; possibly as low as £10,000.
The deadline for a company investment tax-wise is your company’s year-end, which is likely to be different to the tax year.
As mentioned earlier, your company can possibly invest more than £40,000 as you can carry forward any unused annual allowances from the 3 previous tax years.
I am a shareholding director in my own business and draw a low salary with the bulk of my income coming from dividends.