Agricultural businesses could face 31st March Corporation Tax countdown

Agricultural businesses could face 31st March Corporation Tax countdown
 

• A fifth (22%) of UK businesses have year-end on 31st March
• Thousands of registered agricultural companies may be affected
• Pension contributions before year-end could reduce tax payments

 
Agricultural businesses can follow the lead from other sectors and use employer pension contributions to reduce Corporation Tax liability, says Steve Meredith, pension specialist at NFU Mutual.
 
"More than half a million companies in the UK need to act by 31st March to reduce their January 2013 tax bill," said Meredith. "That equates to more than ten thousand companies in UK agriculture alone. Employer pension contributions should be arranged now if those companies want to use these deductions to reduce their tax liability.
 
"Contributions to employees' pensions are a great way to reduce a company's tax bill as they're normally allowable deductions for Corporation Tax. It's not only a tax-efficient way of boosting employees' retirement funds, it will also reduce profit and, in turn, the amount of tax due.
 
"Deducting pension contributions from the bottom line could also lead to a welcome tax repayment for companies who registered a healthy profit last year but expect to make a trading loss or just a small profit this year. The trading loss rules mean any company can set back this year's loss against last year's profits.
 
"Businesses need to plan ahead to make sure they're making the most of the tax reliefs and trading rules available to them. Taking action before the Accounting Reference Date or year-end could help to boost employees' pensions and gain vital relief from Corporation Tax."
 
Thousands of agricultural businesses could be facing their accounting year-end this March, if national trends reported by Companies House are followed.
 
The year-ends of more than a fifth (22%) of UK companies is on 31st March and now is the time to make employer pension contributions and reduce Corporation Tax bills or even gain tax repayments, according NFU Mutual.
 
Figures obtained from Companies House show March is the most popular month nationally for companies to choose as their year-end. With many thousands of registered agricultural companies in the UK, many of them will have to submit their annual accounts this March and calculate their bill for Corporation Tax.
 
The value of pensions may fall as well as rise and so you may get back less than you invest. You can only access pension funds after the age of 55. For further information on corporate and personal pensions and the associated tax reliefs, contact your local NFU Mutual agency.

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