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Pension

New Year Tax Planning Ideas

At this time of year, we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April. An obvious tax planning point would be to maximise your ISA allowances for the 2021/22 tax year (still £20,000 each). You might […]

Read more January 10th, 2022

Pension Tax Relief Unchanged

There was much speculation that the Chancellor would restrict the tax relief for saving into a pension to basic rate only. Thankfully that has not happened (yet) and the key limits are unchanged. The annual pension input limit for most taxpayers remains at £40,000 which covers both individual and employer contributions. The lifetime pension allowance […]

Read more November 1st, 2021

HMRC Warning Not To Use Unfunded Pension Arrangements

HMRC are currently attacking a marketed tax avoidance scheme using unfunded pension arrangements to avoid Corporation Tax, Income Tax and National Insurance contributions. HMRC strongly believes these arrangements do not work and will seek to challenge anyone promoting or using these arrangements and make sure the correct tax is paid. Users of these arrangements may […]

Read more July 13th, 2021

Pension Contribution Is Tax Efficient For Both Employee And Employer

Pension contributions to approved pension funds on behalf of employees and directors continue to be a tax-free benefit provided the annual input limit is not breached. The contributions are also deductible for the employer provided incurred wholly and exclusively for the purposes of the trade and paid before the end of the accounting period of […]

Read more July 13th, 2021

Budget Day On 3 March

There has been a lot of speculation on what will be in Rishi Sunak’s second Budget in early March and whether there is any tax planning that you should consider before then. The government will have to start paying down the massive £2 trillion of borrowings at some stage. Increasing tax rates would send the […]

Read more February 11th, 2021

Pension Planning Before The End Of The Tax Year

For most taxpayers, the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer. Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the […]

Read more March 12th, 2020

Possible U-Turn On Pensions For High Earners?

There have been many stories in the press about GPs and senior hospital doctors refusing to take on extra shifts and additional responsibilities due to the additional tax they are required to pay on the extra pension contributions paid by the NHS. A number of solutions have been put forward. There are now strong rumours […]

Read more February 10th, 2020

Government U-Turn On Pension Tax For Doctors And Others?

In previous articles, we have reported that hospital doctors and GPs were lobbying the government to amend the pension tax rules. The current system of restricting tax relief on pension contributions means many doctors paying almost all of the extra salary back in tax if they take on additional responsibilities or work additional shifts. This […]

Read more September 16th, 2019

Doctors Lobbying For Pension Tax Changes

Hospital doctors and GPs are lobbying the government to amend the pension tax rules as the current system of restricting tax relief on pension contributions means many doctors paying almost all of the extra salary back in tax if they take on additional responsibilities or work additional shifts. This is an issue that doesn’t just […]

Read more June 10th, 2019

Request That The Pension Charge Is Paid By Your Fund By 31 July

The Pension Annual Allowance tax charge depends on the individual’s marginal rate of tax. Where their income exceeds £150,000 it would be at 45%. Thus if the pension input for 2018/19 Was £40,000 and the limit is tapered to £10,000, the excess of £30,000 would incur a £13,500 tax bill on top of their normal […]

Read more June 10th, 2019

High Income Child Benefit Charge And State Pension

Last month we looked at tax planning to minimise or eliminate the high income child benefit to keep both husband and wife (or civil partners) looking after a child below the £50,000 threshold. Where the income of one of the individuals exceeds £60,000 such that the whole of the child benefit is taxed they may […]

Read more June 10th, 2019

Changes To National Minimum Wage April 2019

National Minimum Wage (NMW) and National Living Wages (NLW) increased from 1 April 2019. Please see the table below for the new rates: Employers should review the ages of employees to ensure they are paid the correct gross pay when carrying out your payroll procedures. At Shapcotts we check an employee’s age as part of […]

Read more April 24th, 2019

New Workplace Pension Limits From 6 April 2019

The amounts that employers and workers will be required to pay into workplace pensions are due to increase from 6 April unless the worker opts out. The new limits will be 5% from the worker and 3% from the employer. The total minimum contribution will therefore increase from the current 5% overall to 8%. In […]

Read more March 12th, 2019

Higher Rate Tax Relief for Pensions Continues

There has been much speculation that the Government would further limit tax relief for pension contributions by removing higher rate tax relief. That measure would save the country £34 billion in tax. However, the only change announced concerns a new lower limit on amounts that can be saved in a pension when individuals have started […]

Read more November 29th, 2016

Further Pension Flexibility

The Government will bring in new legislation from 6 April 2016 to allow people who are already receiving income from an annuity to agree with their provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product. Currently, such action would give rise to a […]

Read more April 10th, 2015