Balancing tax vs. pension

Is your trading structure maximising opportunities for pension growth? Simon Bruce shows why you should ensure your practice and your pension are working together.

Over the last decade, we have seen a drive for doctors to set up limited companies for their practices. This is mainly because it was assumed that small businesses would pay less tax than sole traders or partnerships.

In reality, this was not always the case and the commercial benefits of running the practice as a sole trader could sometimes outweigh marginal tax differences.

When the additional income tax rate fell from 50% to 45% in 2013-14, there seemed less incentive to form limited companies, and partnerships became popular again.