Change company year-end?

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Hi all,

Client company (PSC) currently on a 30/9 year-end. Profits are approx. £150K year-on-year. 

Director wants the company to make a contribution into his pension fund (he's currently fully-funded so there have been no inputs for the past 5 years).

Am suggesting:-

a) Shorten current POA to 31/3/23;

b) Company pays into his pension fund after 5/4/23 (after max. pension funding has been relaxed) - bringing forward unused relief from previous years - so say £100K input.

Hoping that by shortening the AP the pension payment will fall fully into the following 12-month AP and attract full 26.5% CT relief (rather than being 'averaged' if accounting date remains at 30/9). 

Anything obvious I'm missing please?

Thanks.

 

Replies (3)

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By Matrix
29th Mar 2023 17:39

Probably worth doing if he wants to, depends on his view of the markets.

I thought the max funding being relaxed affects drawdowns, how does it affect contributions? A fully funded client was advised to contribute £100k this week.

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By Winnie Wiggleroom
30th Mar 2023 06:52

The pension limits only really apply when there is a crystallisation event so there is nothing stopping paying in 100k now, you do not have to wait. But also don't forget that the 100k will bring the profit down to 50k anyway

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By Ruddles
30th Mar 2023 09:58

Is the company subject to IR35?

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