Investment for self-employed where tax is not paid on the amount invested?

wednesday2212

I am self-employed (I am also employed on a part-time basis). When I was employed previously, we were given a presentation by a financial adviser from HSBC. She told us about a pensions/savings plan (I forget which) in which you could invest by having a set sum deducted from your pay before it was taxed. As I am self-employed, I wondered if there was a similar scheme in which I could invest and which would be tax deductable.

Any help would be appreciated!

Thanks

dunstonh

You appear to be thinking of SAYE schemes as an employee. These dont apply to the self employed as you cant buy shares in your company as there are none.

However, you have pensions and S&S ISAs.

payless

From OP's post - lperhaps it was just a GPP presentation ?

Surely a personal pension would have same overall effect (tax) for the self employted

Loughton_Monkey

You will get tax relief on any 'normal' Personal Pension you buy. Do not buy one, though, from a High Street Bank due to poor value.

gadgetmind

dunstonh wrote: »

You appear to be thinking of SAYE schemes as an employee.

All the SAYE schemes that I have participated in have required the investment contributions to come from fully taxed pay.

wednesday2212

These dont apply to the self employed as you cant buy shares in your company as there are none.

It wasn't buying shares in the company, the company I worked for was a small Ltd Co. It was some kind of saving scheme

Surely a personal pension would have same overall effect (tax) for the self employted

..How does this work? Are pension contributions tax deductable?

dunstonh

gadgetmind wrote: »

All the SAYE schemes that I have participated in have required the investment contributions to come from fully taxed pay.

I was thinking of "savings plan" that was specific to employed status and tax efficient. SAYE being tax efficient at the end rather than up front.

Pension obviously fits the "pension" side of the comment and re-reading the post, it does seem like pension is more likely.

wednesday2212

If we assume that our friend from the HSBC was talking about a pension; are pension contibutions tax deductable for the self-employed? If yes, is there a limit to the amout I can contribute each year?

payless

Yes and yes and no

liumits are at http://www.pensionsadvisoryservice.org.uk/personal--stakeholder-pensions/stakeholder-pension-schemes/contribution-levels--tax-relief

Even if you don't pay tax you can still pay into a personal pension scheme and benefit from basic rate tax relief (20 per cent) on the first £2,880 a year you put in. In practice this means that if you pay £2,880 the government will top up your contribution to make it £3,600.

also see
http://yourmoney.moneyadviceservice.org.uk/guides/retirement/saving_for_retirement.html

wednesday2212

Thanks for all your help everyone!!

wednesday2212

Hi Payless,

Thank for that info - very helpful!

Please can you clarify something for me...

From your example, this means that I would still have to pay tax on the £2,880 as I would have to declare it as profit. However, with the HSBC scheme, the pension contribution payments were taken before any tax was applied. Is this correct?