Copperstone House

01792 390 490
Pension Planning For Business Owners, Swansea, Gower, Llanelli

Pension Planning For Business Owners

We have many clients who run their own businesses and require our regular advice on a number of planning areas. Not all planning with smaller companies is limited to pensions, however below includes a list of some of the pension planning we undertake on a regular basis:

  • Profit extraction strategies
  • Commercial property planning with Self Invested Personal Pensions (SIPP)
  • Pension planning with own company shares or preference shares
  • Loan backs from pension schemes


Explaining the above planning in full is difficult without tailoring it to the specific company and director’s own circumstances.


To give you an understanding of one of these areas we have put together the following on profit extraction.



For business owners pension planning should be a key part of their profit extraction strategy.


Company owners will work closely with their accountant identifying what proportion of their income should be paid out to them in salary and what proportion in dividends.


At Copperstone we work closely with our clients and their accountants in identifying any pension planning opportunities.


Profit extraction via a pension can be advantageous to a business owner.


The table below shows the advantages and disadvantages using all salary, all dividends or all pension to provide retirement income and is based on having £200,000 profit available for remuneration.


COMPANY All Salary All Dividends All Pensions
Corporation Tax payable £0 £40,000 £0
Employers NI Payable £23,320 £0 £0
INDIVIDUAL All Salary All Dividends All Pensions
Salary £176,680 £0 £0
Income Tax £65,604 £35,576 £0
Dividend £0 £160,000 £0
National Insurance £6,748 £0 £0
Employer pension contribution £0 £0 £200,000
Profit Extracted £104,328 £124,424 £200,000


Warning: The information in this table is correct at the date of publication and may have changed. However, it will still be relevant for demonstrating the difference between the three options.

To provide the most flexibility for retirement a range of solutions should be considered but pension planning should definitely feature in this.

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