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Pension creating a trading loss for the year

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    #11
    Originally posted by Delboypass View Post
    Thanks

    I have read extensively,done a few searches and spoken to accountants.

    Just looking to see if any accountants on here or anyone able to point to a specific GOV document saying, yes, legitimate. This is the part I am missing.

    I cant see a thread or article that says yes taking a pension can cause a legitimate trading loss and CT claw back or anyone who has been given a slapped paw by the HMRC.
    Hi,
    What was your final resolution to the problem? Did you manage to make the pension contribution and claim back CT? I'm in a very similar situation now, and would like to know your solution.

    Ian

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      #12
      Originally posted by ian2013 View Post
      Hi,
      What was your final resolution to the problem? Did you manage to make the pension contribution and claim back CT? I'm in a very similar situation now, and would like to know your solution.

      Ian


      I did exactly that - made a big loss because of putting the maximum 3 years allowance into a SIPP.

      You'll never guess what the Revenue did.

      They put a massive CT rebate into my bank account.
      HTH
      "Don't part with your illusions; when they are gone you may still exist, but you have ceased to live" Mark Twain

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        #13
        I'm going through the same process at the moment, trying to calculate how much my company can contribute. Accountant has advised that it cannot create a trading loss for the accounting period, otherwise it will not be exempt from CT and HMRC may look into it and charge a penalty.

        You can take your chances, or play it safe ... I'm playing it safe.

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          #14
          Originally posted by rascal View Post
          I'm going through the same process at the moment, trying to calculate how much my company can contribute. Accountant has advised that it cannot create a trading loss for the accounting period, otherwise it will not be exempt from CT and HMRC may look into it and charge a penalty.

          You can take your chances, or play it safe ... I'm playing it safe.
          It would also create extra work for the accountant....

          I'd be asking for links to the guidance that states this is not allowed.

          Comment


            #15
            In the same boat

            I find myself in the same situation - a healthy company operating profit even if I utilise the £40 maximum payment into my personal pension.

            I have been making company contributions to may personal pension over the last few years but not up to the maximum so there is a shortfall that I could take advantage of.

            So my question would be can I make pension contributions or even dividend payments out of accrued company profit rather than operating profit?

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              #16
              Originally posted by geoffreywhereveryoumaybe View Post
              I find myself in the same situation - a healthy company operating profit even if I utilise the £40 maximum payment into my personal pension.

              I have been making company contributions to may personal pension over the last few years but not up to the maximum so there is a shortfall that I could take advantage of.

              So my question would be can I make pension contributions or even dividend payments out of accrued company profit rather than operating profit?
              Yes, why wouldn't you be able to?
              merely at clientco for the entertainment

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                #17
                Originally posted by eek View Post
                Yes, why wouldn't you be able to?
                According to my accountant: You must also ensure that the sum of any contributions made doesn’t cause the company to make a trading loss for the period (company expenses exceeding any income generated), and this would be in reference to the company accounting period, which spans May to April.

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                  #18
                  Originally posted by geoffreywhereveryoumaybe View Post
                  According to my accountant: You must also ensure that the sum of any contributions made doesn’t cause the company to make a trading loss for the period (company expenses exceeding any income generated), and this would be in reference to the company accounting period, which spans May to April.
                  Why? Companies make a loss all the time and eat into reserves..
                  merely at clientco for the entertainment

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                    #19
                    Originally posted by geoffreywhereveryoumaybe View Post
                    According to my accountant: You must also ensure that the sum of any contributions made doesn’t cause the company to make a trading loss for the period (company expenses exceeding any income generated), and this would be in reference to the company accounting period, which spans May to April.
                    Please ask your accountant to point you to the guidance that reflects this, and then post it here.

                    I suspect they just don't want the (tiny) bit of extra work if means for them.

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                      #20
                      damn lazy accountant!

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