ÀÏ˾»úÎçÒ¹¸£Àû

Pension contributions for sole traders


Produced by Tolley in association with
Owner-Managed Businesses
Guidance

Pension contributions for sole traders


Produced by Tolley in association with
Owner-Managed Businesses
Guidance
imgtext

Pension planning should play an important part of any annual review. This is true for any personal tax clients, but for unincorporated sole traders it can be especially important.

In terms of profit extraction, pension contributions are one of the main tax efficient options available to a sole trader. With sufficient planning and care, contributions provide a very flexible means of achieving tax savings at high marginal rates. Where a sole trader’s marginal rate of income tax fluctuates between tax years due to variations in trading income, pension contributions can be timed to take place in the good years in order to maximise the rate of tax relief received.

Unless advisers are suitably qualified and authorised to give investment advice, it is vital that they do not give investment advice of any sort. This includes advice concerning pensions. Advice should be restricted to the tax consequences of making contributions. For further information, see the Regulated investment advice guidance note.

Pension contributions

For a sole trader the income tax benefits of making a pension contribution

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+â„¢
TAKE A FREE TRIAL NOW
David Everett
David Everett

Partner, Lane Clark & Peacock , Employment Tax

David Everett, is the head of the Pensions Research team at LCP. One of his key roles is to analyse and communicate regulatory and professional developments to audiences both within and outside LCP.David has built up many years of experience in the occupational pensions regulatory field covering a broad spectrum including government policy and legislation, particularly that emanating from the Department for Work and Pensions, the Pensions Regulator, the Pension Protection Fund and other compensation schemes, the Pensions Ombudsman and the Courts and the technical and ethical regulation of actuaries through the Financial Reporting Council and the Institute and Faculty of Actuaries respectively.He also assists the ACA in responding to government consultations.He's the editor of LCP's weekly Pensions Bulletin and undertakes other technical writing for the firm, as well as contributing to TolleyGuidance Employment taxes for the Pensions module.

Powered by
  • 04 Apr 2024 07:30

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Advising sole traders

Popular Articles

Personal Tax

Timing of disposal for capital gains tax

Timing of disposal for capital gains taxDate of disposalThe date of the disposal determines the period in which the gain is subject to capital gains tax (CGT). When the rates of CGT change, the determination of the date of disposal can also affect the rate of CGT that applies to the gain.See the

14 Jul 2020 13:50 | Produced by Tolley Read more Read more
tag-icon Year-end tax planning
Employment Tax

Loans written off

Loans written offCompanies sometimes provide directors, employees or shareholders with low interest or interest-free loans either as part of the reward package or on special occasions to help the individual meet significant expenditure. The employment income implications of these loans are discussed

14 Jul 2020 12:11 | Produced by Tolley Read more Read more

Exemption ― insurance ― overview

Exemption ― insurance ― overviewThis guidance note provides an overview of the VAT treatment of insurance products and should be read in conjunction with the Insurance ― specific transactions and Exemption ― insurance ― brokers and agents guidance notes.Is insurance exempt from VAT?Supplies of

Read more Read more