Pension deduction & change of year end

Pension deduction & change of year end

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Client company with year end 31/3/06 has projected taxable profits of £200k.
Company wants to pay £150k into dirs personal pension in April 2006 under new rules. Is it possible to accelerate the tax relief by shortening the year end by 11 months to 30/4/05 and then preparing 1 month set of accounts and Y/e 30/4/06 accounts including pension contribution against profits. Seems OK on the face of it. Any thoughts? Thanks

Barry Steed

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By deanshepherd
07th Aug 2005 17:51


Agreed.

I agree with Neil that extending the year end is the simpler option.

Be aware that there are restrictions on being able to extend the year end again, whereas there is no limit to the amount of times you can shorten an accounting period.


Dean


Free Online Helpdesk from MMI, the Surrey Accountants.

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By NeilW
05th Aug 2005 19:21

Extend it.
Why not simply extend FY06 to 30/4/06 and do the two corporation tax calcs then for the thirteen month period. Any losses created by the pension contribution can be carried back to the 12 months to 31/3/06.

NeilW

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