Do you have a company pension scheme? Are you making the most of pensions as a highly tax efficient way of rewarding and retaining key staff?
Tip: Employer contributions into a pension scheme can provide significant savings for both the employee and the employer. With the advent of auto-enrolment changes, and the requirement for all employers to be making contributions for employees in the near future, it is worth considering how to make savings now.
Have you explored how to use pensions to cut the tax bill on wages and salaries?
Tip: Under what are known as “salary sacrifice” schemes, it is possible to save up to 25.8% in National Insurance contributions on the pension contributions made. These savings can, of course, be shared between you and your staff so that everybody is better off.
Have you considered using one of the more “exotic” types of pension schemes to give you more control and flexibility and allow you and your staff to build up even bigger nest-eggs?
Tip: Some of your options might include an Executive Pension Plan (EPP), a Small Self Administered Scheme (SSAS), or a Self Invested Personal Pension (SIPP). These schemes allow you to invest in a wider range of assets, which may include the premises occupied by your business.
If your income is more than £150,000 have you considered the impact of the changes on your pension contributions?
Tip: Individuals with income in excess of £150,000 can claim a further 25% in 2013-14 tax relief on pension contributions in addition to the 20% reclaimed by the pension provider, subject to meeting certain limits. Higher rate tax payers can still reclaim 20%.
If you would like to arrange a free meeting with a Liverpool accountant to discuss business tax, either at our office or at your premises, please contact us on 0151 724 3960 or by email at [email protected].
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Added by Jon Davies