Pension And Starting Up As Self Employed

samjocky

Hi there

My significant OH is leaving the Armed Forces soon and will receive an annual pension of roughly £12000. He will be starting up in the taxi business as self employed also.

How does he stand on taxation of his pension? What is the best option? Should he opt to have his pension taxed at source and then go and self assess the rest of his tax liability through his self employment wages? Or is there another tax efficient way of doing this that we are not aware of?

Also, does anyone know where he will stand on Child Support? he currently pays (far too much) on the old rules of CSA on his current wages. What does he declare to the CSA when he comes out of the Services?

Thanks to all of you who read this and offer advice!

dunstonh

How does he stand on taxation of his pension?

It's taxable income.

What is the best option?

Not a lot of options really.

Should he opt to have his pension taxed at source and then go and self assess the rest of his tax liability through his self employment wages?

He should get his personal allowance attached to his pension income.

Or is there another tax efficient way of doing this that we are not aware of?

You pay what you owe. There is no way to avoid it. However, having it attached to the pension means that you will get more initially as self employed income would utilise the personal allowance in arrears.

Also, does anyone know where he will stand on Child Support? he currently pays (far too much) on the old rules of CSA on his current wages. What does he declare to the CSA when he comes out of the Services?

He declares his pension income. Although he will need to declare his self employed net profit when he knows it.