The client has spoken to 2 pension advisers. On says that as she has no income in the current year she may contribute £2880 only, and have it topped up by the notional tax amount. However second adviser says she has 3 years unused relief so can do 3 x this figure. The client is feeling bewildered so has asked me. I am unsure so have posted the question on here to gauge the opinion of others. For the avoidance of doubt she has had no paid income since before COVID and is under age 75.
Apologies for the delay in coming back on this one. I have been laid up sick. The "director/partner" does not have any suitable friends or relatives to be a second partner. He drives a very expensive motor car for business. He is not interested in funnelling profits through the Ltd company to avoid tax, just needs a way of getting limited liability with just one person.
Before doing that, and inevitably increasing your cost base, I think I would ask myself whether you are charging as much as you can your all of your services? If not then now would be a good time to push prices up. Any clients leaving can be compensated for by new work (which you are currently having to turn away). I wish I had done that 20 years ago when I was in a similar position. It might have made what followed simpler.
Thanks for the replies everyone. I think the problem is agents who are existing clients probably have the expectation that you will do this work on their behalf. I can see the fee to do the work properly might be in escess of what you are charging for preparing the year end accounts in some cases! Saying you are unwilling to do the work is fine, but probably means the loss of that client.
Ah - but are you making an adjustment for holidays/sickness etc before you take your multiple. Eg a full time employee does 7x5x52 = 1820 hours per annum, but chargeable time is probably down to about 1400 - 1500 hours.
My answers
The client has spoken to 2 pension advisers. On says that as she has no income in the current year she may contribute £2880 only, and have it topped up by the notional tax amount. However second adviser says she has 3 years unused relief so can do 3 x this figure. The client is feeling bewildered so has asked me. I am unsure so have posted the question on here to gauge the opinion of others. For the avoidance of doubt she has had no paid income since before COVID and is under age 75.
Yes - that's it.
Fair point - but is there a technical reason for not doing it?
Does that organisation no longer exist? Come to think of it I have not had a mailshot from them for ages.
Apologies for the delay in coming back on this one. I have been laid up sick. The "director/partner" does not have any suitable friends or relatives to be a second partner. He drives a very expensive motor car for business. He is not interested in funnelling profits through the Ltd company to avoid tax, just needs a way of getting limited liability with just one person.
Close on Fridays!
Before doing that, and inevitably increasing your cost base, I think I would ask myself whether you are charging as much as you can your all of your services? If not then now would be a good time to push prices up. Any clients leaving can be compensated for by new work (which you are currently having to turn away). I wish I had done that 20 years ago when I was in a similar position. It might have made what followed simpler.
Thanks for the replies everyone. I think the problem is agents who are existing clients probably have the expectation that you will do this work on their behalf. I can see the fee to do the work properly might be in escess of what you are charging for preparing the year end accounts in some cases! Saying you are unwilling to do the work is fine, but probably means the loss of that client.
Is that not illegal?
Ah - but are you making an adjustment for holidays/sickness etc before you take your multiple. Eg a full time employee does 7x5x52 = 1820 hours per annum, but chargeable time is probably down to about 1400 - 1500 hours.