I just changed accantants and am about to pay my NI/PAYE for 2003-2004. I had intended on making a one-oof pension payment for that tax year. My new accountant tells me I can't make deductions for pension payments as I've left it too late, it should have been done by 5 April 2004, Can anyone say whether this is this correct?
Pension contribution deadline 2003-2004
Jul 02, 2004
3 Replies
No, he is wrong. Find another accountant... What you need to do is make a carry-back payment as explained here:
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(it is not restricted to stakeholder pensions, but is available for any personal pension scheme approved for tax relief). Note that the declaration must be made before or at the time of the pension payment, and that (obviously) this amount cannot count in the current tax year. However, you will declare the sum of this and any other payments in this year's return, but deduct the amount already "carried back" to leave a net amount available for tax relief in 2004/5.
It's very simple. As I said, shoot your accountant - he is extremely negligent in not being au fait with this provision.
Thanks, you've probably saved me a lot of cash I would otherwise have paid in taxes. Cheers Phil
Contributions always welcome...
I have been making carry-back pension payments for several years now. Although an employee on a reasonably stable salary, I still prefer to wait until the end of the year and do the sums before working out what, if any, pp payment suits my mood and immediate finances. Mostly, I do it to offset any higher-rate tax exposure, not being anywhere near convinced that a private pension per se is all that wonderful an investment with just a basic rate rebate. At 40%, it is more easily justified, and for the last few years with CTC affecting the calculations, the rebate was about 47%, which is approaching a no-brainer. (I think the CTC thing has changed now.)
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