½Û×ÓÊÓƵ

Pension contributions for sole traders

Produced by Tolley in association with
Owner-Managed Businesses
Guidance

Pension contributions for sole traders

Produced by Tolley in association with
Owner-Managed Businesses
Guidance
imgtext

Pension planning should play an important part of any annual review. This is true for any personal tax clients, but for unincorporated sole traders it can be especially important.

In terms of profit extraction, pension contributions are one of the main tax efficient options available to a sole trader. With sufficient planning and care, contributions provide a very flexible means of achieving tax savings at high marginal rates. Where a sole trader’s marginal rate of income tax fluctuates between tax years due to variations in trading income, pension contributions can be timed to take place in the good years in order to maximise the rate of tax relief received.

Unless advisers are suitably qualified and authorised to give investment advice, it is vital that they do not give investment advice of any sort. This includes advice concerning pensions. Advice should be restricted to the tax consequences of making contributions. For further information, see the Regulated investment advice guidance note.

Pension contributions

For a sole trader the income tax benefits of making a pension contribution

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
David Everett
David Everett

Partner, Lane Clark & Peacock , Employment Tax


David Everett, is the head of the Pensions Research team at LCP. One of his key roles is to analyse and communicate regulatory and professional developments to audiences both within and outside LCP.David has built up many years of experience in the occupational pensions regulatory field covering a broad spectrum including government policy and legislation, particularly that emanating from the Department for Work and Pensions, the Pensions Regulator, the Pension Protection Fund and other compensation schemes, the Pensions Ombudsman and the Courts and the technical and ethical regulation of actuaries through the Financial Reporting Council and the Institute and Faculty of Actuaries respectively.He also assists the ACA in responding to government consultations.He's the editor of LCP's weekly Pensions Bulletin and undertakes other technical writing for the firm, as well as contributing to TolleyGuidance Employment taxes for the Pensions module.

Powered by

Popular Articles

Substantial shareholding exemption ― overview

Substantial shareholding exemption ― overviewThe substantial shareholdings exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. No claim is required. Provided

14 Jul 2020 13:44 | Produced by Tolley Read more Read more

Research and development expenditure credit (RDEC)

Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for

14 Jul 2020 13:24 | Produced by Tolley in association with Will Sweeney Read more Read more

Computation of corporation tax

Computation of corporation taxCompanies pay corporation tax on the taxable total profits (TTP) generated in a chargeable accounting period (CAP).To ascertain whether the entity is within the charge to corporation tax, see the Charge to corporation tax guidance note.For more information on the type

14 Jul 2020 11:16 | Produced by Tolley Read more Read more