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Contractor Tax Accountants

5 articles

Pension and Dividends

Practical guides on pension and dividends for UK contractors and PSC directors.

  • Pension and Dividends

    Pension Carry Forward for Contractors - The Three-Year Rule and High-Profit Planning

    The annual allowance for pension contributions is £60,000 in 2026/27, and unused allowance carries forward from the previous three years. This rule turns the employer pension contribution into a strategic tool for contractors in high-profit years or those planning an exit, letting them make a contribution that would otherwise breach a single year's allowance without triggering a charge.

    14 min read

  • Pension and Dividends

    Contractor Pensions: Using Your PSC to Build Retirement Savings

    An employer pension contribution from your company is the single largest tax-efficient extraction route open to a PSC director in 2026/27, beating salary and dividends comfortably. This guide explains the £60,000 annual allowance, the taper for high earners, three-year carry-forward, the money purchase annual allowance trap and why the employer route beats a personal contribution.

    15 min read

  • Pension and Dividends

    SIPPs and Pension Schemes for Contractors: Choosing the Right One

    Once you know an employer pension contribution is your biggest tax-efficient lever as a PSC director, the next question is which scheme to put it into. This guide explains the three main pension types available to contractors, why SIPPs are a common choice for limited company directors, what factors to weigh when comparing providers, and where the boundary sits between accounting advice and regulated financial advice.

    13 min read

  • Pension and Dividends

    Contractor Pension Tax Relief: How PSC Contributions Cut Your Tax

    An employer pension contribution from your personal service company is the most tax-efficient extraction route available to a PSC director. It reduces corporation tax, carries no National Insurance on either side, and is not taxed as income when it enters the pension. This page explains the mechanics, the CT saving arithmetic, and why the employer route beats the personal contribution route for most contractors.

    12 min read

  • Pension and Dividends

    Dividend Tax for Contractors: 2026/27 Rates and Planning

    Finance Act 2026 raised the ordinary and upper dividend rates from 6 April 2026, pushing the rates contractors face to 10.75%, 35.75% and 39.35% in 2026/27. This guide explains how dividend tax works in practice, how dividends sit on top of your other income, and the planning options available to keep the bill as low as legally possible.

    12 min read
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