Friday 20th March, 2020
Team, the end of the tax year is approaching. 😱
This means it could be an ideal time to review your retirement savings and reduce your tax bill by paying into a pension. This doesn’t need to be a snooze-fest, bear with me. It’s only a couple of minutes of your life to read this. A couple of minutes to potentially save yourself a LOT of money. What else were you going to do? Exactly. Buckle up.
The government is really worried about the fact that we’re all going to live forever and nobody is saving enough money for it. Therefore, you get some cushty little tax breaks if you’re a forward thinker. At team Penfold, we’re forward-thinkers, and we want you on our team. 🙌
You, my director friend, could put some money into your pension so you declare less profit. How?
You know you declare all your coffees as expenses? That’s only a fraction of what you can save by putting money in a pension as well.
Yes, your Companies House listing doesn’t look as fancy, but you won’t care when you’re living the retirement of dreams on a beach somewhere. Also, when was the last time you used your Companies House statement as a chat-up line? (If you did, you need to up your game).
Therefore, Directors, you can save yourself a tasty 19% on your corporate tax bill by putting some of that revenue in a pension. (My editor would like me to tell you that contributions must be paid before the end of your company’s financial year in order to count. He's a bit of a geek - but it's a reason to get moving!)
Not a limited company owner? Don’t worry, you can benefit too! The government literally gives you FREE MONEY if you save into a pension. How does this work?
This is HUGE. If you paid £1,000 into a pension before the end of the tax year, you'd get an immediate top-up of £250 AND your tax bill will be reduced by another £250!
So, let's summarise.
It's a win-win. Make your tax bill less awful and get yourself set up for retirement with Penfold.
((With pensions, as with all investments your capital is at risk. The value of what you put in may go up as well as down. This blog does not constitute financial advice. In order to benefit from tax relief the pension contribution limit is currently 100% of your income, with a cap of £40,000. If you put more than this into your pension, you may have to pay a tax charge on any amount over the contribution limit unless you have unused pension annual allowance from up to the 3 previous tax years.)