Making pension contributions before the end of this tax year can help mitigate your tax liability. Such contributions attract tax relief at your highest marginal rate, be that 20%, 40% or 50%.
This form of tax planning has become even more appealing with the announcement in this weeks budget of plans to make it easier to take benefits in retirement. It may no longer be necessary to purchase an annuity, or suffer punitive tax for income drawdown.
Take advantage of the pension carry forward rules in order to benefit from any unused allowances from the previous three tax years. This is generally the difference between the annual contribution limit (currently £50,000) and the pension input each year and can be added to your relief for 2013/14. Note that the annual pension allowance reduces to £40,000 from 6 April 2014.
Contact us if you require guidance on end of tax year planning.