Reply to: Retrospective pension payments ?

[swebb]

Does it mater that much? It's not like an allowance that is lost forever... just pay in double this year and get double the discount off your corp tax this year instead..?

Well normally maybe it wouldn't matter too much but I finished a contract and I'm currently considering whether to work again or just put my feet up If I don't work again or for sometime the pension contribution wouldn't be as tax efficient as it would last financial year because I had a very good year.

[swebb]

You can do this. Possibly for more than one year but ask an accountant or someone.

Yes it's all sorted now Thanks for the replies, I've now put a few things into an electronic calendar with associated alarms. Whatever is going on in my other life now atleast I'll be informed about important financial dates

[xoggoth]

I did have a link but can't find it now, however I did find an old reference that even back in 2001 you could do catch up payments, think the rules are more relaxed now.

[xoggoth]

You could just pay that much more next year. An accountant told me a few years back that in considering what are reasonable amounts to a pension HMRC would take into account previous years without payments.

[d000hg]

Does it mater that much? It's not like an allowance that is lost forever... just pay in double this year and get double the discount off your corp tax this year instead..?

I've been advised that though that limit NLUK mentions is around, you also have to be careful paying in more than your salary - which for contractor Ltds might be quite low.

If he only puts in a couple of grand a year though, I agree with you.

[MrRobin]

Does it mater that much? It's not like an allowance that is lost forever... just pay in double this year and get double the discount off your corp tax this year instead..?

[northernladuk]

Do you have the money still sitting in your company and do you have a pension scheme already set up?

Quote from a source on the web..

There is also an 'annual allowance' which limits the annual tax relief which an individual may receive on pension contributions and other increases in a person's pension rights. More can be contributed but the tax exemption on the excess will be recovered. The annual allowance for 2010-11 was £255,000 but this has been reduced to £50,000 for 2011-12. Individuals who have been a member of a registered pension scheme and who have unused annual allowance from the previous three tax years can carry that allowance forward, meaning they may not have to pay the annual allowance charge.

Can you not use the carry forward and just dump a very large amount in this year to keep it nice and clean?

[d000hg]

Hi,

Just got my end of year accounts with my calculated corp tax bill and I realised I forgot to pay anything into my pension for the year. Usually I get my company to put a few quid into my pension. Is it to late to do it now from the companies 2010-2011 tax year, is there any flexibility on this?

Cheers in advance for replies.

Steve

You can do this. Possibly for more than one year but ask an accountant or someone.

[swebb]

Legally your payments should be made in the company year. No accountant will condone you doing otherwise as it's more than it's worth to them.

However everyone knows there is an issue where cheques are often cashed later than the date on them, which is why loads of people don't like writing cheques.

BTW next time someone posts an answer and you don't quite get the post go away and have think. No one gets upset if you don't reply almost immediately.

Thanks for the response SueEllen. My pension company implied that a dated cheque is one way forward, my end of year accounts haven't been signed off yet so I'm going to look in to doing this. In future I think I'll do what I do with my ISA, but the money in as early as possible.

And yes I should have a think about things before replying

[SueEllen]

The cheque option sounds viable but I bet there is some clause or other stopping me from doing it. My accountant keeps stum about most matter pension/investment as it pulls him in FSA area's that he doesn't want to go to (I don't blame him).

Legally your payments should be made in the company year. No accountant will condone you doing otherwise as it's more than it's worth to them.

However everyone knows there is an issue where cheques are often cashed later than the date on them, which is why loads of people don't like writing cheques.

BTW next time someone posts an answer and you don't quite get the post go away and have think. No one gets upset if you don't reply almost immediately.

[swebb]

Hello Steve

Your question will probably get more sensible responses if you post in 'Accounting'.

I don't know for sure, but I think if you had written a cheque from your company bank account to the pension provider dated before your year end, and it hadn't yet been cashed, I believe it would still fall into that year's accounts. Whether that's a feasible option probably depends how long ago your year end was.

Hi k2p2,

My year end was about 6 weeks ago, my accountant has just reminded me that I made no pension contributions. I usually pay twice during the year but with other matters in my life it kinda slipped to the back of the queue of things to do.

I know in years past as a permie I have paid money into my pension taking into account un-used payments from previous years but I'm unsure how I stand as a contractor with my business paying.

The cheque option sounds viable but I bet there is some clause or other stopping me from doing it. My accountant keeps stum about most matter pension/investment as it pulls him in FSA area's that he doesn't want to go to (I don't blame him).

[swebb]

How the **** did you 'forget' to pay in to pension for a year? You run a business man. Make this kind of mistake and 'forget' to pay HMRC and you go to jail.

Either you are rubbish with finances or your lying and I know what my money is on.

Thanks for the response northern. Take two deaths in the family, working all hours away from home and all sorts of other issues and then see how easy it is to forget issues to do with finance!

[DimPrawn]

How the **** did you 'forget' to pay in to pension for a year? You run a business man. Make this kind of mistake and 'forget' to pay HMRC and you go to jail.

Either you are incompetant with finances or your lying and I know what my money is on.

Now time for my dumb question of the day....Does pension payments even affect your corp tax bill?

Yes, paying into a pension reduces the profitability of your company, so the more you pay (yourself) as pension payments, the less tax your company pays.

[northernladuk]

Hi,

Just got my end of year accounts with my calculated corp tax bill and I realised I forgot to pay anything into my pension for the year. Usually I get my company to put a few quid into my pension. Is it to late to do it now from the companies 2010-2011 tax year, is there any flexibility on this?

Cheers in advance for replies.

Steve

How the **** did you 'forget' to pay in to pension for a year? You run a business man. Make this kind of mistake and 'forget' to pay HMRC and you go to jail.

Either you are rubbish with finances or your lying and I know what my money is on.

[DimPrawn]

Paying tax is better for the economy that paying into a pension.

Then next bank bailout will be grateful for your co-operation.

HTH