The Self Assessment Tax Deadline for Pension Contributions is looming!

news Oct 09, 2017

The Self Assessment Tax Deadline for Pension Contributions is looming!
Planning for your financial future will give you peace of mind today. This week, our Expert
Retirement Planning Adviser, Denis Murphy, Premier Financial Services, discusses the characteristics of The Self Assessment Tax Deadline for pensions.

Tax Deadline -       31st October 2017  Or

                                    14th November 2017 (for those Filing Online)

Although, like all dates, it comes around each and every year, this one can throw up more than its fair share of complications on an annual basis.
What is the purpose of the deadline date.
Tuesday 14th November is the final date for making a pension contribution, and opting to backdate it for income tax relief purposes to 2016. (The date is 31st October for individuals who do not both pay and file their returns on line).
Self Employed Taxpayers
For self-employed clients, making the pension contribution prior to the tax deadline, should ensure they will pay less income tax now, as the pension contribution can reduce not only their final income tax liability for 2016, but also their preliminary income tax bill for 2017, which is also due. The reduction in preliminary income tax defers that element of income tax until 2018.
PAYE Taxpayers
In the case of PAYE clients, it can mean physically receiving a tax rebate from the Revenue, as all income tax would have already been paid in full for 2016 via the PAYE system. For backdating Additional Voluntary Contributions (AVCs), individuals must still be in the same pensionable employment as they were in 2016. If they have changed jobs since 2016 backdating an AVC contribution will not be possible. Similarly, if a client retired from pensionable employment in 2016, it will not be possible to backdate an AVC at this juncture. In contrast, clients who left or retired from non-pensionable employment in 2016 could make a Personal Pension or PRSA contribution and apply for income tax relief against their 2016 non-pensionable relevant earnings.
It’s important to note that even if an individual has finalised their liability for last year and is in receipt of a final balancing statement from the Revenue, their tax affairs for 2016 can always be re-opened with a backdated pension contribution

The Content of this column is generic in nature and is not meant to provide individual investment advice to the reader.
Before an investor considers any investment they should seek independent professional investment advice suitable for their own personal circumstances.

Premier Financial Services is a registered trade name of PCS Financial Services (Kerry) Ltd.PCS Financial Services (Kerry) Ltd. T/A Premier Financial Services is regulated by the Central Bank of Ireland

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