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Corporation Tax relief on Accrual

Can I claim Corporation Tax relief on Salary or Pension Accrual

My Ltd company accounting reference period is 01/01/2017 – 31/12/2017. As a Director and employee I paid myself £8k (below NI threshold) through payroll as well as dividends. During this period, I also accrued £9k to pay into a Pensions Scheme.

The amount was never paid into a pension scheme just accrued up to 31/12/2017. My understanding is that as the cash was never paid I am now unable to use this for Corporation Tax relief in 2017 ?.

Am I able to change the accrual to a salary accrual and pay myself within 9 Months for the 01/01/2018-31/12/2018 period as well as retain the corporation tax relief in 2017. If so does this put me on the hook for NI for 2017 as I have already received £8k in salary for this period.

Any other legitimate options I could use to utilize the Tax relief on the £9k for 2017 ?.

It was over 10 years ago since I gained my ACCA so somewhat out of touch any advise would be greatly appreciated.

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By Ruddles
20th Jan 2018 17:34

If you’re ACCA qualified then you should realise that the best advice for a company owner that doesn’t understand tax and accounts is to engage a professional that does.

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20th Jan 2018 18:22

No.

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20th Jan 2018 19:50

There has to be a liability at the year end for it to be relievable for CT. When you say "accrued" - how is that? Is it simply an intention or is there some legal requirement? I'd suggest the chances are it's not relievable - pensions are usually relievable only if the payment has been made.

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21st Jan 2018 13:05

If only you'd asked this question a month ago ......

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