DO I bank the year's profits and pay tax or do I leave them in the business in case things aren't so rosy over the next 12 months? Why not do both without paying the tax, via pension contributions? Directing profits from a company into a pension need not mean that your business loses access to the much-needed cash. Whilst the benefits of receiving Corporation Tax relief on the contributions are immediate, the cash can still be accessible by the company should there be, among others: * expansion plans * a relocation on the horizon * management buyout opportunity * a large influx of orders to fulfil and creditors' terms are tight * expensive refinancing terms imposed by existing lenders Towards the end of 2013, we helped an owner-managed business to expand to a larger site using the directors' pension savings to bridge the funding gap that commercial lenders were unwilling to help with. Here we purchased part of the new site through the client's pension arrangement. Now the business will pay rent directly into the directors' own pension plans through this super tax-efficient mechanism. For some, it may not seem that the issues are of any concern to their business, but what about the future? Tax efficient planning now can stand you and your business in good stead, knowing that the flexibility requirements of your business can be met. Pension Contribution Limits While individuals can currently accumulate £50,000 a year in pension contributions, the limit is being reduced to £40,000 a year from 6 April. Subject to certain conditions, we can direct up to £240,000 into an individual's arrangement in this tax year. Pension Lifetime Allowance The Lifetime Allowance is £1.5m and from 6 April this level is being reduced to £1.25m, unless you have registered for protection for a higher amount. Our consultants at OCM Wealth Management offer a financial planning audit for both your business and personal affairs to see whether you are on track to meet your future objectives. If you would like to discuss this further, please contact us on 0845 338 1971.