This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Improve your company’s cash flow and save more tax!

Shared from Tax Insider: Improve your company’s cash flow and save more tax!
By Kevin Read, October 2021

With corporation tax rates due to rise, Kevin Read explains why OMBs may want to consider deferring directors’ pension contributions.

Tax-efficiency of company pension contributions

Employer pension contributions are very tax-efficient. They will become even more so from April 2023, when corporation tax (CT) is increasing for companies with profits exceeding £50,000. For stand-alone companies, the marginal CT rate on profits between £50,000 and £250,000 will rise to 26.5% from the current flat rate of 19%, while for profits above £250,000, it will become 25%. 

The director of an OMB will typically draw only a personal allowance-level salary, which restricts their own personal tax-relievable contributions, due to the rules on net relevant earnings [FA 2004,  s 189(2)]. Company contributions are not restricted in this way, but a director may suffer an annual

This is one of our 2098 Premium articles

To see this article in full and unlock access to our complete library of 2098 articles click 'subscribe & unlock' below:

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Start your free trial today

Interested in receiving the latest monthly tax saving tips? Start your 14 day free trial to our newsletters today.