UNDER REVIEW FOLLOWING THE CHANCELLORS SPRING STATEMENT When you are trading through your own limited company, you can optimise how you pay yourself via salary and dividends to be tax efficient. This is normally achieved by paying a small salary to secure pension entitlement, and taking the remainder via dividends. Preserving pension entitlement One of the main advantages of paying a small salary is to ensure that the year remains a qualifying year for state pension and cont

It is prudent to plan ahead for retirement and tax breaks are available to encourage savings into a registered pension scheme. Contributions into a registered pension scheme attract tax relief as long as the contributions are covered by the available annual allowance and are not more than 100% of earnings (or £3,600 if higher). Tax-relieved lifetime pension savings are capped by the lifetime allowance, currently set at £1,073,100. Annual allowance The annual allowance places