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Avoiding tax on your pension contributions?

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  • 1. Avoiding tax on your pension contributions? Scots Financial Advisor William George highlights important pension changes regarding tax on pension contributions. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Image by PT Money - Creative Commons
  • 2. "If you have been seeking to shield yourself from paying income tax on your annual pension contributions, then these changes are important for you." Let's take a look at why avoiding tax on your pension contributions is no longer viable. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Image by PT Money - Creative Commons
  • 3. Changes to tax on pension contributions Q: What are these changes? A: For 2011-2012 HMRC cut the annual pension contribution allowance from £255,000 to £50,000. In 2014-15 this will drop further to £40,000. These restrictions apply to all contributions, it doesn't matter whether they are made by individuals or employers. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info
  • 4. Q: In what way has there been tax avoidance in the past? A: Using registered pension schemes set up for family members, some people have avoided paying income tax and national insurance by allowing their employers to make these pension contributions which are given as benefits of flexible employee payment packages. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Changes to tax on pension contributions
  • 5. Q: Why haven't people been taxed when the employer has been the contributor? A: This is because if the employee is a member of a registered scheme and the employer pays contributions to their registered pension or a family member's, no extra tax is charged if they fall under the annual limit for each individual pension plan. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Changes to tax on pension contributions
  • 6. Q: So why can't employees still do this? A: From April 6, 2013 this pension tax loophole will be closed. From now on, employers will be legally obliged to report any contributions they make as an employee benefit which will also attract National Insurance. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Changes to tax on pension contributions
  • 7. Q: What should I do now? A: Keep up to date on changes like this through your Financial Advisor, because heightened HMRC vigilance on tax avoidance is here to stay. Copyright: All Rights Reserved 2013 William George www.williamgeorge.info Changes to tax on pension contributions
  • 8. "Your retirement is too important to get in trouble with the Inland Revenue over." If you need more advice please do phone me below... Call FREE on 0800 321 3508 Copyright: All Rights Reserved 2013 William George www.williamgeorge.info