Client's Limited Company had a very good year to June 30th 2018 making a nice profit and they now want to accrue a pension contribution for the year to June 30th.
I'm pretty sure that is not possible but thought it worth just checking. My understanding was that a company pension contribution can only be put through the accounts in the year it is paid. Is this correct?
Thank you
Replies (8)
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Tax relief can only be given on contributions that have actually been paid. The amount shown in the profit and loss account in respect of the obligations of defined benefit schemes may be substantially different from the amount of contributions paid to the scheme, but it is only the amount actually paid that can be considered for tax relief.
I agree the OP was specifically referring to cash paid basis which implies tax treatment, though the OP might have been confused or not fully explaining the question.
Size of profits and contribution dependent, presumably if the contribution in the current year creates a loss, the loss can be carried back.