Accrue pension (prop director)

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Spritzer

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I am a Proprietary Director of a new Company which would come under the surcharge on service company rules. I intend to set up a company pension scheme to fund which will also reduce corp tax. However my first year end date will occur before the scheme is set up and also there are cash flow issues ( I will make a profit but not have received the funds). Can I accrue a directors pension and then pay it when company has money to do so?
 
Spritzer said:
I am a Proprietary Director of a new Company which would come under the surcharge on service company rules. I intend to set up a company pension scheme to fund which will also reduce corp tax. However my first year end date will occur before the scheme is set up and also there are cash flow issues ( I will make a profit but not have received the funds). Can I accrue a directors pension and then pay it when company has money to do so?
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Such an accrual is not allowable for corporation tax purposes.

If there are cash flow issues you should postpone the pension contribution until these improve.
 
Hi Spritzer

I am not a tax specialist, but...

to avoid Corporation Tax, you can accrue Director's Salary but you must pay the salary within 6 months of the year-end.

Brendan
 
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