Business Services • Business Tax
Basis period reform is a significant change to the way the trading profits of sole traders, partners...
By RJP LLP on 16 May, 2024
Business Tax • Personal tax • Personal Taxation • Taxation
Amendment to the New Pensions Legislation
By Lesley Stalker on 8 September 2009
We have become aware that there has been a small amendment by HMRC which has the effect of slightly increasing the contributions on which you can obtain 40% tax relief in the current year from £20,000 to £30,000 in certain circumstances.
The position is as follows:
If the pension contributions you have made in previous tax years have not been ‘normal regular’ contributions (i.e. not monthly or quarterly), the contributions you make in the current year on which you are entitled to claim 40% tax relief are restricted to £20,000.
The subsequent amendment says that where you have made ‘infrequent contributions’ (i.e. less frequently than quarterly) and where these have averaged at least £30,000 per annum in the years 2006/07 to 2008/09 inclusive, you are able to claim 40% tax relief on contributions in the current year of up to £30,000 in total.
In summary therefore, if the amounts and frequency of your contributions have been as above, you will be able to claim higher rate tax relief in the current tax year on pension contributions of up to £30,000 in total and tax relief on the contributions exceeding £30,000 will be restricted to basic rate relief.
If you have been making either monthly or quarterly contributions in recent years, then you will be entitled to continue to claim 40% tax relief on those same levels of continuing contributions in the current year.
If you have any queries in this respect please do not hesitate to contact us
