The business owners have their pension contributions paid direct from the business. Am I right in thinking this is an allowable expense? They have also just drawn £20000 direct to their pension fund claiming they are owed it from introducing capital some time back. Would this be drawings still, they? I assume they could claim tax relief either through the provider or through their self assessment.
OK, first up, Steve.. I am not a pension expert, in any way. I am just throwing some thoughts about :)
Is this a personal or company pension?
It would have to be a proper company pension to be allowable as a business expense (which I think is only for Ltd Co)
If sole trader has personal pension, the contributions go to drawings, and then are put onto the SA return for tax relief
I am not sure about tax relief given at source on the contribution. I think they got rid of these and now everyone claims on the TR.. but hopefully someone can pick this up for us and explain further......
First thing is it a limited company or sole trader/partnership.
If the latter then pension payment goes to drawings and will get tax relief on their personal tax return by extending the basic rate band by the contribution.
If a ltd company then will be an allowable cost if it is an employer contribution (needs to have been properly set up to qualify).
Its a partnership so I will mention it to the accountant and start posting to drawings, I think the accountant already disregards it until self assessment but I will confirm it :)
If it is a partnership any pension contributions would be classed as drawings however there is a facility to pay any amount due in tax over into a pension scheme rather than paying it to hmrc -don't know all the rules on this and think there is a timing deadline but I know it is possible
Any pension contributions are included in the self assessment
