Company profits

Company profits

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Hi,

A client of mine is a single director/shareholder. His company will be showing a small profit for the tax year of approx £10,000. This profit will be generated from a single contract that spans the first 2 months of the company tax year.

For the remainder of the tax year, is there any restriction in the company continuing to pay pension contributions to the director? What about if this led to the company making a loss in the tax year  ie:purely due to the amount of pension contributsions - is this allowable?

Matt

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John Toon
By John Toon
15th Apr 2011 12:05

No restriction

Pension contributions are an allowable business expense, as long as the business continues to trade, and are therefore deductible for CT purposes.

Just remember that there is now a £50,000 gross limit on contributions that can be made in any one year into an individual's pension. However unused allowances can be carried forward, so more could be payable but this depends on when the contributions year runs to.

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